Difference Between Leasehold and Freehold

Leasehold vs Freehold

Freehold and leasehold are words used in connection with properties and are confusing for first time buyers. People cannot make out the difference between a freehold property and a leasehold property and remain confused as to which one they should buy. These are important legal terms that entitle you to certain rights and obligations and each has its own advantages and disadvantages. Here is a brief explanation of both the types of properties to highlight the differences.


When you buy a property which is freehold, you become the exclusive owner of the property as well as the land on which it is constructed. No one else makes any claim to the property and you can renovate and repair anytime according to your wishes depending upon rules and regulations. It is this independence that many find so attractive while purchasing a property. The only disadvantage of this type of property is that you have the sole responsibility of carrying out repairs that may be required from time to time. You are free to live for as long as you wish in your freehold property and you can sell it upon your whims.


When you buy a leasehold property, you are actually buying the rights to live and use the property and not the property itself. This lease is for a set period of time and you do not actually own the property. Most of the flats are leasehold which implies that you need to pay the ground rent, which is very low indeed to the freeholder. This rent covers the cost of the repairs and maintenance of the property. In a leasehold property, there are additional annual costs to be borne out, so it is prudent to read the document carefully if you are not prepared or not have made a budget for these annual costs. Most leases are for 99 years, however, you can get an extension if you so desire. Since most of the flats are leasehold, it implies that all those living in a compound with flats must bear the cost of repairs and renovation of the common property that they are using.

In brief:

• Freehold confers full rights of ownership of the property and the land on which it sits to the buyer whereas leasehold means a buyer does not become the owner but only gets the right to live in the property

• Buyer of leasehold property has to bear additional annual repair and maintenance costs whereas freehold property buyer assumes sole responsibility of repairs

• Freehold property is forever whereas leasehold property is for a set period of time. Normally the lease is for 99 years.