Legal News | 16.07.25

Freehold, leasehold and share of freehold

Freehold, leasehold and share of freehold – a guide to different types of property ownership

There are different ways you can legally own property, and the way that you hold property can impact what you can do with the property and potential costs. This guide provides a brief explanation of freehold, leasehold and share of freehold property.

What is a freehold property?

When you own the freehold of a property you own both the property and the land that the property is on, and you own this indefinitely until you decide to sell. As an owner of the freehold, you do not usually need to ask for anyone’s approval to make changes to the property, own pets or sublet (provided you have the requisite planning permission, and these activities are not prohibited by restrictive covenants). However, along with this independence, you are also solely responsible for maintenance to the property and insurance, which can be costly.

What is a leasehold property?

When you own the leasehold of a property, you own the property but not the land the property is on, and in the case of flats you do not own the building the property is in; the land and the building are instead owned by the freeholder. You also only own your property for the time remaining on your lease.

When you are purchasing a leasehold property, you need to be aware of the possible additional costs such as ground rent and service charges payable to the freeholder, which may increase over time depending on the terms of your lease. Furthermore, it can be costly to renew your lease which is something it is recommended you do when it has 80 years or less left to preserve the value of your property and ensure it is still mortgageable.

You may also have less freedom with what you can do with a property if it is leasehold, with it being likely that you need the freeholder’s permission to make any significant changes or alterations and some leases having restrictions on owning pets or sub-letting your property.

One possible advantage of leasehold ownership is that you normally don’t have to worry about maintenance for the communal areas and structure of the building as this is dealt with by the freeholder and already paid for with your service charge.

Therefore, before you purchase a leasehold property it is important to be fully aware of any rights, restrictions and possible costs under your lease.

What is a share of freehold?

When you own a property (usually a flat) with a share of freehold this means that you own both the leasehold for your flat as well as a part of the freehold of the whole building, with the rest of the freehold being held collectively by your fellow flat owners. Typically, in larger buildings this form of ownership is achieved through the creation of a company in which each of the co-freeholders are a member of or have shares in.

One of the advantages of having a share of freehold is that it allows leaseholders to have a say in how their building is run which can result in maintenance works being completed more quickly and at a lower cost due to greater transparency. It can also make it easier and cheaper to renew a lease than when there is a separate freeholder.

However, there can be a considerable amount of responsibility involved in having a share of the freehold as between your co- freeholders you have responsibilities such as arranging maintenance, ensuring that all legal requirements are complied with and preparing both budgets and accounts for the whole building. Furthermore, these tasks can be made even more difficult if your fellow freeholders do not see eye-to-eye. One way to resolve some of these issues is to hire a professional management company to run the building for you however, these often come at a cost.

Ultimately, when purchasing a property, it is important to be aware of all the rights and restrictions that apply to that property whether it is freehold or leasehold. If you would like further guidance or if you are looking for a conveyancer to handle your property purchase or sale, please contact our Residential Property team at property@wansbroughs.com | 01380 733367.