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If you own the freehold of your home, it implies that you own the building and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the building or land and should pay ground rent to the freeholder.
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Freehold vs leasehold: the essential distinctions

Do you understand what is meant by a freehold or leasehold residential or commercial property? Experienced estate agent, Ian Harris helps describe the essential distinctions.

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What does leasehold imply?

You are purchasing a lease from the freeholder for the right to reside in the residential or commercial property for a set number of years. You won't technically own the residential or commercial property outright, the freeholder (or landlord) will continue to own the residential or commercial property and the ground it rests on. Leasehold is prevalent when buying a flat or house as it sits within a larger structure.

The variety of leasehold houses has however grown recently, 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 private parts of the Act are being executed one at a time so not whatever has actually been done yet. You can see the progress of the modifications here. Eventually there will be a restriction on the sale of new leasehold flats, making Commonhold the brand-new default tenure instead, where each unit-holder owns the freehold of their home.

Read more about what's altering for leasehold

Main things to understand that have been executed up until now are:

- If you own a flat, you can now extend your lease without waiting two years first (as of January 2025).

• This means that more leaseholders in mixed-use buildings can get the right to handle