Leasehold Vs Freehold: Know the Difference

Over the years, buying and selling a property has become a regular chore of people, which was once done only by a limited group of people. Purchasing a property in a fast-paced location like London or other parts of the UK is beyond overwhelming for many reasons. Access to properties has now become effortless with the overflowing inventory across different boroughs and neighbourhoods, especially in the UK. The options are limitless, where everything from modern flats to period homes is scattered almost everywhere. During this process, people would have definitely come across specific terms related to the real estates business like freehold and leasehold. Every dwelling would be categorised under either of these options based on how it is utilised by the property owner. It is not easy to differentiate these properties without prior input from the homeowner. However, with the aid of St Albans Estate Agents and other local professionals, sorting them could be easier for all.

Freehold Vs Leasehold Properties

Ultimately, the owner of a freehold property owns both the building and the land on which it is situated entirely and forever, as opposed to the owner of a leasehold property, who only owns the areas that are clearly crafted by the lease and only for a defined amount of time. When you purchase a freehold property, you are also buying the land it is situated on. The land it rests on is not included when you buy a leasehold property, in comparison. A freehold home that you purchase will belong to you until you decide to sell it or transfer the ownership to another person. You will own the home for a certain period if you buy a house with a leasehold. When the lease expires, whoever holds the freehold regains control of the property.

In the UK, it’s more typical for homes to be sold with their corresponding freeholds, but that’s not always the case. Because of this, understanding the distinction between a freehold and a leasehold home is crucial.

If a home has a leasehold, the owner may elect to sell it if they want to keep ownership of the land or if it has been divided into several residences. When a home is turned into apartments, the apartments may be marketed as leasehold units, while the freehold property is kept by the previous owner or developer.

While maintaining the freehold title, a short leasehold may be a practical way for a property owner to make money from the asset. The buyer can choose to work with Residential block management whenever they have doubts regarding these properties. 


The decision to purchase a leasehold home might not appear appealing. Depending on how long the lease is for, you will only have ownership of the property for a specific time. However, buying a leasehold property can have a lot of benefits, and there are lots of reasons why a building is sold this way.


A short leasehold property can cost more than a freehold one, even if there may not be much of a price difference between a long leasehold and a freehold property. This obviously indicates that you will only have temporary ownership of the property. For instance, if you purchase a leasehold property with just 25 years left on the lease, whatever you paid for it would essentially be lost when the lease expires, and the freeholder assumes ownership of the property.

Depending on whether a property is a leasehold or freehold, there may be a sizable price difference. If a freehold title is sold instead of a leasehold title, the same property in the same area is probably going to cost more money. But there might not be as much of a price difference as you might anticipate because of the lengthy leasehold.

The potential imposition of a service charge is another significant distinction between freehold and leasehold real estate in the UK. Although you won’t be obliged to pay a service charge as a freeholder, you will be responsible for the expenses associated with maintaining certain parts of the property. Similar to this, you will bear some of the responsibility for these costs if you own a portion of the freehold.

Every property comes with a definite set of rules, perks and drawbacks. Matching the buyer’s requirements with the availability will help them figure out the right kind of property to invest in. If people are open to following rules and living within a restricted space, they can opt for leasehold or otherwise freehold. Considering several factors like the duration of stay of an individual, the size of inhabitants of the house, or the budget, people can decide to select the right type- leasehold or freehold and take the next steps from there. 

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