If you own the freehold of your home, it indicates that you own the structure and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the structure or land and should pay ground rent to the freeholder.
Freehold vs leasehold: the crucial distinctions
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Do you understand what is implied by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris assists explain the crucial differences.
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What does leasehold mean?
You are buying a lease from the freeholder for the right to live in the residential or commercial property for a set variety of years. You won't technically own the residential or commercial property outright, the (or proprietor) will continue to own the residential or commercial property and the ground it rests on. Leasehold is prevalent when buying a flat or apartment as it sits within a larger structure.
The variety of leasehold houses has nevertheless grown over the last few years, specifically with new builds that are offered directly through the designer.
Recent modifications to the law
The Leasehold and Freehold Act 2024 is now law, but individual parts of the Act are being executed one at a time so not whatever has actually been done yet. You can see the development of the modifications here. Eventually there will be a restriction on the sale of new leasehold flats, making Commonhold the new default tenure instead, where each unit-holder owns the freehold of their home.
Learn more about what's altering for leasehold
Main point to understand that have actually been executed up until now are:
- If you own a flat, you can now extend your lease without waiting two years first (since January 2025).
- This implies that more leaseholders in mixed-use buildings can apply for the right to manage