Did you know that there are two different forms of legal ownership in homes? You probably haven’t heard of it because some estate agents tend just lightly to mention it without going in-depth. The difference, however, is so significant that it can be the line that separates a home that’s worth your investment and one that’s not. A lot of people are not able to determine it when they purchase a home, only to regret it later on.

In this post, the people behind Conveyancing Store, the best online conveyancing tool, explains the difference between freehold and leasehold, so you have the information you need when you buy your property:

What Is Freehold

If what you own is freehold, it means you own both the building and the plot of land it stands on outright and in perpetuity. In the land registry, your name will be referred to as the “freeholder,” and you own the “title absolute.” Freehold should be your preferred option because there’s nothing wrong with it. Here are some of its benefits:

  • There are no annual ground rents to worry about
  • There’s no other freeholder who would be in charge of maintaining the building or charging a high price for the maintenance.
  • You can change the roof and outside walls of the building to your liking.

Whole houses are sold freehold because there’s no reason for an actual home to be considered leasehold. That said, some new-build homes fall under leasehold, so you must check before you sign any document.

What Is Leasehold

Leasehold means that you are leasing from a freeholder or a landlord to occupy the home for a specific number of years. Most leases are long-term, some even lasting 90 to 120 years or even up to 999 years, though it could be as short as 40 years or so.

Here’s what you need to know about a leasehold:

  • The leaseholder has a contract with the freeholder that dictates the legal rights and the responsibilities of both parties.
  • The freeholder will be responsible for maintaining the common parts of the building, including the entrance hall, the staircase, the exterior walls, and the roof. In some instances, a leaseholder could argue to claim “right to manage,” which means they’ll be responsible for the maintenance of the agreed-upon parts of the building.
  • Leaseholders will need to pay maintenance fees, a part of the building’s insurance, and annual service charges.
  • Leaseholders usually pay annual “ground rent” to the landlord.
  • Leaseholders will have to get permission for the most significant works that have to be done to the property.
  • Leaseholders have to follow certain restrictions, whether that’s subletting, owning pets, or others.
  • If leaseholders fail to fulfill the lease terms, the lease could be forfeited.
So, Should You Avoid Buying Properties on a Short Leasehold?

Here’s what you should remember: leases that are less than 90 years can become problematic, so you should know to approach it with care. Think about it: any less than 90 years long lease can affect the home’s value. If what you have is a short lease, you can expect the property to decline in value despite the rise in price in your area. That means that fewer people will want to buy it and that mortgage companies might become reluctant to lend on such properties.


As much as possible, stick to properties that will make you a freeholder and not a leaseholder. After all, you don’t want to invest your money in a property that won’t be yours after a few decades. It’s so much better to be a freeholder. But whether you decide to freehold or leasehold, you are going to find the best conveyancer to help you through the complexities of buying a property. You can find some online tools that can help you compare conveyance fees.

Conveyancing Store is the best online conveyancing tool that you can use to get the best quotes and ensure that there are no hidden fees. Enjoy a hassle-free comparison of conveyance fees now!