Freehold, Leasehold or Commonhold

What's Right For You?

Properties in the UK are generally offered as Freehold, Leasehold or Commonhold. Each will have factors that require careful consideration to see if they are suitable for your circumstances and budgeting. The definitions below will help you gain an insight into each.

Freehold

Generally if you are purchasing a house it is most likely that you will be purchasing it as freehold. The main definition is that you will own the property and land itself and do not have to worry about a lease running out or dealing with an external landlord.

Leasehold

If you are purchasing a flat or maisonette it is most likely that you will purchasing it as leasehold or buying into a share of the freehold. The main definition is that you will only own a leasehold property for a fixed period of time (the length of the lease). The lease itself is an agreement with the landlord, who owns the freehold of the building, that tells you how many years you will own the property.

As the lease term reduces you may find that the property value decreases however you will need to check if you have a right to extend the lease from the freeholder.

Share of Freehold

It is also possible to purchase a share of the freehold when purchasing a leasehold property. This arrangement results in all leaseholders of the building jointly owning a share of the freehold through a company and the maintenance is the responsibility of the management company.

Commonhold

If you are purchasing a flat or maisonette you may be purchasing the property as commonhold. Although a lot rarer commonhold is a new type of property ownership that was introduced in 2002 as an alternative to the leasehold system.

The aim of commonhold ownership is to bridge the gap between freehold and leasehold as it allows freehold ownership of individual flats, maisonettes and houses within a building or an estate. The ownership is not limited by time as it is with a lease and as such the value of the property does not deteriorate with time.

Responsibility with managing the communal and shared maintenance of the overall building lies with the commonholders as joint owners through a commonhold association.