Buying
Leasehold or freehold: what first-time buyers need to know
1 min read · Updated
The short answer
With freehold you own the home and the land. With leasehold you own the right to live in it for a set number of years, and pay charges to the freeholder. Most flats are leasehold, so check the lease length and charges before you offer.
The lease length matters most
A lease counts down every year. Many lenders won't lend on a lease with less than about 70 to 80 years left, and below 80 years it costs more to extend. First Key flags any lease under 100 years so you can ask about it early.
The charges to ask about
- Service charge: your share of looking after the building. Ask for the last three years' bills and any big works planned.
- Ground rent: a yearly payment to the freeholder. Check how it can rise. Most new leases since 2022 have no ground rent.
- Major works: a new roof or lift can mean a large one-off bill. Ask if there's a reserve fund.
What's changing in the law
The Leasehold and Freehold Reform Act 2024 aims to make extending a lease cheaper and easier, with extensions of 990 years. Only some parts are in force so far, so ask your solicitor what applies when you buy.
A guide, not financial or legal advice. Rules and rates change, so check with your lender, broker or solicitor. Where our numbers come from.