Leasehold or freehold: Does it legally matter when buying a home?

Charlotte Hunter, a Partner in our Residential Property team, discusses the legal implications of buying freehold or leasehold.

When you’re looking to buy a home, one of the first things you might think about is whether the property is freehold or leasehold.  

On the surface, it might seem like a simple choice — owning outright versus owning with conditions — but the reality of ease of purchase and long-term implications is more nuanced.

 What Do ‘Freehold’ and ‘Leasehold’ mean?

• Freehold means you own the property and the land it stands on indefinitely. You’re responsible for everything - maintenance, repairs and insurance. This gives you full control.
• Leasehold means you own the property for a fixed period which is the term of the lease. For example: 99 or 125 years. You do not own the land that the property sits on. A freeholder owns the land and usually you will pay a ground rent (although for most, not all new leases granted on or after June 30, 2022, ground rent has been abolished) and service charges. You must also comply with the lease terms.

Things a buyer might consider are that with a leasehold property, maintenance is generally dealt with for you (although this does depend on the terms of the lease.) 

Usually the freeholder is obliged to deal with the exterior maintenance and insurance, so this type of ownership might suit the requirements of many people.

Freehold properties are often simpler legally because you own the property and land outright. There isn’t a complicated and lengthy lease to understand.

Here at Cozens-Hardy LLP we specialise in dealing with all Residential Property matters and have expert knowledge to guide you through the process.  

We are happy to discuss your intended sale or purchase with you at an early stage and address any questions you may have.

For more information, please contact Charlotte Hunter, Partner, Residential Property on 01603 625231 or email cehunter@cozens-hardy.com

Please note, as with all our articles, this information is not intended to be a comprehensive review of the law.  You should always seek specialist advice relevant to your own circumstances.