What is the difference between freehold and leasehold?
Freehold means you own the property and the land outright. Leasehold means you own the right to occupy it for a fixed number of years under a lease from the freeholder. Most flats are leasehold, and the lease length, ground rent and service charges all affect what buyers will pay.
Read more in our guide: Portfolio sale timescales
Key facts at a glance
| Item | Detail |
|---|---|
| Freehold | Ownership of the building and land with no end date |
| Leasehold | A right to occupy for a fixed term, often 99 or 125 years when granted, paying ground rent and service charges |
| Commonhold | Freehold ownership of a flat with a shared commonhold association; still rare |
| Lease length lenders usually want | Commonly at least 70 to 85 years remaining |
| Marriage value on extensions | Payable on leases under 80 years under the current rules |
| New leases since 30 June 2022 | Ground rent limited to a peppercorn (zero) for most new long residential leases |
| Leasehold and Freehold Reform Act 2024 | Reforms to extensions and enfranchisement, being brought into force in stages |
Why Tenure Matters to Buyers
Investors buying leasehold flats look closely at how many years are left on the lease, the ground rent and how it can rise, the service charge and any major works planned, and who manages the building. As a lease shortens, especially below 80 years, it becomes more expensive to extend and harder to mortgage, so values fall. Leases with ground rents that double every 10 or 15 years can also deter lenders.
Selling Leasehold Flats in a Portfolio
- Management packs. The buyer's solicitor needs a leasehold information pack (often form LPE1) from the managing agent or freeholder, which can take weeks and carries a fee. Order it early.
- Consent to let and sell. Some leases need the freeholder's consent to sublet or assign, or require a deed of covenant from the buyer.
- Building safety. The Building Safety Act 2022 protects qualifying leaseholders from some remediation costs, but a lease generally does not qualify if the leaseholder owned more than three UK residential properties on 14 February 2022. Portfolio landlords can therefore be exposed, and buyers will ask for the leaseholder deed of certificate and any EWS1 form.
- Short leases. Extending before sale can add value. Since 31 January 2025 you no longer need to have owned the flat for two years before claiming a statutory extension, but the process still takes time. A buyer may prefer to buy with the benefit of a served notice.
- Freehold houses are usually simpler, though some new-build houses were sold leasehold, with the same issues.
Leasehold Reform
The Leasehold Reform (Ground Rent) Act 2022 ended ground rents on most new long residential leases from 30 June 2022. The Leasehold and Freehold Reform Act 2024 aims to make extending a lease or buying the freehold cheaper and easier, including removing marriage value and allowing 990-year extensions, but parts are still being brought into force and some have been subject to legal challenge. Check the current position with your solicitor before relying on it.
Owning the Freehold of a Block
Some landlords own a whole building on one freehold title, with the flats let on assured tenancies. These can be sold to an investor as a single block, sometimes at a better price per flat than selling long leases individually, and the buyer may qualify for non-residential SDLT rates if there are six or more dwellings. Check whether the building could be a section 257 HMO.
Official Sources and Further Reading
General information for landlords in England, checked against official sources in October 2026. It is not tax, legal or financial advice: speak to a qualified accountant or solicitor about your own circumstances.
Frequently Asked Questions
Freehold means you own the property and the land outright. Leasehold means you own the right to occupy it for a fixed number of years under a lease from the freeholder. Most flats are leasehold, and the lease length, ground rent and service charges all affect what buyers will pay.
It can be, particularly with a lease under 80 years, a rising ground rent, high service charges or building safety issues. A long lease with reasonable charges usually sells normally.
It varies by lender, but many want at least 70 to 85 years remaining, often with a minimum number of years left at the end of the mortgage term.
Only to qualifying leases. A lease generally does not qualify if, on 14 February 2022, the leaseholder owned more than three UK residential properties.
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