Understanding Freehold and Leasehold

Introduction

The terms ‘freehold’ and ‘leasehold’ refer to the two different ways in which properties in England and Wales can be owned.

Scotland has its own version of freehold, called ‘feuhold’. Leasehold exists, but is much less common there than in England and Wales.

This article explores the differences between freehold and leasehold, and provides an outline of some of the main issues surrounding leasehold, the more complex of the two.

Defining the terms

Freehold

If your property is freehold, you own it, and the land on which it is built, outright. When you die, it is part of your estate and can be bequeathed to your heirs. Your entitlement to do with it as you please is limited only by planning and other laws. Any necessary repairs are your responsibility, but you can generally choose not to carry them out if you so wish.

For these reasons, freehold properties (or, in the case of a flat, a property with a share of the freehold) are usually more desirable than leasehold ones, and so are often worth more.

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