Property in the UK: freehold and leasehold, and why the law is changing it

To an outside buyer the British market looks open: there are no restrictions on foreigners buying housing, no permissions are required and citizenship is irrelevant. The trap is not access but the form of the right — and the fact that "bought a flat" in England does not mean the same thing as it does in Dubai.

Freehold — what we would call ownership

Ownership of the land and the building on it, without a term. Mostly detached and terraced houses are sold this way. The owner has no landlord, no annual ground payment and no need to seek consent for works.

Leasehold — a fixed-term right to a flat

Practically all flats in blocks in England and Wales are sold as leasehold: you acquire the right to hold the unit for the remaining term of a lease granted at some point by the landowner. The term at grant may be 99, 125 or 999 years — and it counts down.

• The remaining term is part of the price. A flat with 60 years left costs noticeably less than an identical one with 900, and that is not a discount but a different product.
• A short remainder blocks mortgages. Banks lend reluctantly against short leases, which narrows the pool of your future buyers.
• Ground rent — an annual payment to the landowner. In some older leases it doubled at intervals, turning a nominal sum into a real problem at sale.
• Service charge — a building maintenance charge, separate from ground rent, and it can rise without your agreement.
• Landlord consents may be required for alterations, sometimes for subletting and for keeping pets — those are lease terms, not a general rule.

What the reform changes

The British legislature has taken this structure on seriously: the leasehold reform act passed in 2024 makes extending the term and buying a share of the freehold simpler and cheaper, increases the standard extension, removes the requirement to have owned the property for two years before applying, and restricts the practice of selling new houses as leasehold. Some provisions come in by stages through secondary legislation, so the precise set of rights in force is checked as at the date of the transaction.

Another form — commonhold and share of freehold

There are structures where flat owners jointly own the land through a company: the buyer then has both a flat and a share of the freehold. That is better than classic leasehold — extending the term and managing the building are decided by the owners rather than by an outside landlord. Such properties cost more, all else equal, and justifiably so.

What to check

• How many years are left on the lease — the figure from the title documents, not from the listing.
• The ground rent and the formula for reviewing it. A doubling clause is a red flag.
• The service charge history over several years and any planned major works: the bill for the facade comes to the owners.
• Who owns the freehold and who manages the building. Both the cost of extension and the quality of service depend on it.