Freehold vs leasehold in the UK: what the difference costs

If you are buying a flat in England or Wales, the odds that you are buying it leasehold are overwhelming. Of the 737,733 standard residential sales recorded on HM Land Registry's Price Paid data for 2025, almost every flat changed hands as leasehold — while the vast majority of houses were freehold. Across the whole property register of 16.4 million homes, more than one in five (22.5%, roughly 3.7 million properties) is leasehold.

The distinction is one of the most consequential — and least understood — parts of a UK purchase. It decides whether you own your home outright or hold it on a lease that counts down year by year, whether you pay ground rent and service charges, and how much it might cost to extend your lease later. This guide explains what freehold and leasehold actually mean, what the data shows about who holds which, what leasehold tends to cost, and how the law is changing.

Freehold and leasehold, in plain terms

Freehold means you own the building and the land it stands on outright, with no time limit. You are responsible for maintaining it, and there is no landlord above you. Most houses are sold freehold.

Leasehold means you own the right to live in the property for a fixed number of years — the length of the lease — but not the land underneath it. The land (and usually the structure of the building) belongs to the freeholder, also called the landlord. You buy the remaining years on the lease; when those years run down, the property reverts to the freeholder unless the lease is extended. Leases are typically granted for long terms (99, 125, 250 or 999 years), so in practice a long lease behaves much like ownership — but the lease length, the ground rent and the service charge all matter, and a short lease can be expensive to put right.

A third form, commonhold, lets flat owners hold the freehold of their own flat indefinitely and jointly own and manage the shared parts of the building. It exists in law but has been used only rarely. Government has set out plans to make it the standard for new flats.

The data: who holds freehold, who holds leasehold

The split is sharply divided by property type. Using Land Registry sales that completed in 2025 (standard residential transactions, as recorded on the register in June 2026):

The headline is stark: buy a flat and you are almost certainly buying leasehold (only about 2% of flats sold freehold). Buy a house and you are usually buying freehold — but not always. Around 39,300 houses, 6.4% of all houses sold in 2025, changed hands as leasehold.

That figure is the legacy of the so-called "leasehold houses" practice, where developers sold new houses on leases and retained the ground rent as an income stream. It is heavily concentrated geographically.

Leasehold houses are a North West story

Nationally only 6.4% of houses are leasehold, but in parts of the North West it is the majority. Ranking local authorities by the leasehold share of houses sold in 2025 (areas with at least 400 house sales):

Every authority in that list except Sheffield sits in Greater Manchester or Lancashire. The pattern reflects a long regional tradition of building houses on long leases rather than selling the freehold — a practice that drew national scrutiny when some new-build buyers found their ground rents doubling every decade. It is one of the issues the recent reforms set out to address.

What leasehold costs

Holding a property leasehold can carry three recurring or one-off costs that a freeholder does not face:

• Ground rent — an annual sum paid to the freeholder for the land. Historically modest, but some leases written in the 2000s and 2010s contained escalating clauses (for example, doubling every 10 or 25 years) that could grow into significant sums. The Leasehold Reform (Ground Rent) Act 2022 limited ground rent to a "peppercorn" — effectively zero — on most new long residential leases granted on or after 30 June 2022. Leases granted before then keep whatever ground rent they were written with.
• Service charges — a share of the cost of maintaining and insuring the shared parts of a building (roof, lifts, hallways, grounds). These vary widely by building and are most relevant to flats; new-build apartments often carry higher charges. Our guide to typical new-build service charges sets out the ranges seen in the data.
• Lease extension and enfranchisement — because a lease is a countdown, its length is part of the property's value. Mortgage lenders often hesitate over leases with fewer than about 70–80 years remaining, and historically a separate cost called "marriage value" was added to the premium once a lease fell below 80 years, making extension markedly more expensive. Leaseholders have statutory routes to extend their lease or, collectively, to buy the freehold.

None of this makes leasehold inherently bad — a long lease with a peppercorn ground rent and a well-run, transparent service charge behaves much like freehold ownership. But the lease length, the ground rent terms and the service-charge history are things a buyer needs to see in full before committing.

How the law is changing

Two pieces of legislation frame the current position:

• The Leasehold Reform (Ground Rent) Act 2022 is already in force and removed ground rent (beyond a peppercorn) from most new long residential leases granted from 30 June 2022.
• The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024. It contains a wider set of measures — making it cheaper and easier to extend a lease or buy the freehold, setting a standard extension term, removing the two-year ownership qualifying period, and restricting the sale of most new leasehold houses. Many of its provisions require further regulations before they take effect, so the timing of individual changes depends on those regulations being made.

Separately, in 2025 the government published plans to reinvigorate commonhold and to end the sale of new leasehold flats, with a view to making commonhold the default tenure for new flats. Those plans were set out for consultation and legislation rather than being in force.

Because the detail and timing of these reforms continue to move, anyone weighing a leasehold purchase or a lease extension should check the current position rather than rely on a single summary.

What to check before you buy

For any leasehold property, a conveyancer will normally confirm the figures that matter: the number of years left on the lease, the ground rent and whether it escalates, the annual service charge and any planned major works, who manages the building, and whether the freehold or a share of it is available. The True Cost tool lets you see the all-in monthly cost — mortgage, council tax and energy — for any postcode; for a sense of the flat-dominated, near-universally leasehold market, see the true monthly cost of a Manchester city-centre flat, or compare the cost of buying a flat versus a house. For the wider set of charges that come with any home, our explainer on how council tax bands are set and the rest of our first-time buyer guides cover the running costs in more detail.

The freehold-versus-leasehold question rarely changes whether a property is right for you, but it changes what you are buying and what it will cost to hold. Knowing which one is on the table — and reading the lease in full — is part of understanding the true cost of a home.

Figures based on HM Land Registry Price Paid data for sales completing in 2025 and the 16.4-million-property register, accessed June 2026. Browse all our property cost guides.

This is general information, not advice. Lease terms, ground rents and the law itself vary and are changing. Speak to a qualified conveyancer or adviser before acting.