Property Fundamentals
What's the difference between freehold and leasehold?
Freehold means you own the property and the land it stands on, indefinitely. Most houses in England and Wales are freehold. There is no ground rent and no lease term to worry about. You're responsible for maintenance and insurance of the whole building.
Leasehold means you own the property for a fixed term — commonly 99, 125 or 999 years — but the land remains owned by the freeholder. Most flats are leasehold. The lease sets out ground rent (where applicable), service charges for shared maintenance, and what the leaseholder can and cannot do without consent. Short leases (under 80 years) are difficult to mortgage and reduce in value.
The Leasehold and Freehold Reform Act 2024 caps ground rents on existing leases, makes lease extensions cheaper, and prepares the ground for commonhold to replace new leasehold flats. Check the title via HM Land Registry.
What this means in practice
A two-bed leasehold flat in Manchester M3 originally granted on a 125-year lease in 1998 has 97 years remaining in 2026 — comfortably mortgageable. Service charge runs £2,400/year, ground rent £250. The same flat in 2046 will have 77 years remaining: still above the 80-year statutory threshold but approaching the marriage value cliff that historically doubled extension cost. Under the 2024 Act, marriage value will be abolished once the relevant provisions commence, making 80-year extensions dramatically cheaper. The flat's extension cost in 2046 could fall from roughly £30,000 (pre-reform) to £8,000–£12,000.
Related questions
How much does a lease extension cost?
Statutory lease extensions add 90 years to the existing term and reduce ground rent to a peppercorn. Cost depends on remaining term, ground rent, and property value. Rough rules: a 95-year lease on a £250,000 flat with £200 ground rent costs roughly £6,000–£9,000 plus £2,500 legal and valuation fees. The same flat at 79 years remaining costs £18,000–£25,000 plus fees because of marriage value (abolished once the 2024 Act commences). Use the LEASE calculator for a working estimate.
Can a flat be commonhold?
Commonhold has existed since 2002 but only roughly 20 commonhold developments have ever been registered. The 2024 Act paves the way for commonhold to become the default for new flats, replacing leasehold. Existing leasehold flats can convert to commonhold but require unanimous consent of all leaseholders and the freeholder, which is the practical barrier. Subsequent legislation expected in 2026–2027 is likely to lower this threshold and create incentives for collective conversion.
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