Freehold

Freehold ownership gives property owners full autonomy over their property and the land it sits on. This means there are no additional costs like ground rent or service charges, and the owner is not bound by a lease agreement.

It provides long-term security and can be more desirable than leasehold for buyers, particularly those who prefer complete control over their property.

Maintenance Responsibility: Freeholders are responsible for all property upkeep, including the land, exterior, and structural maintenance.

No Ground Rent or Service Charges: Freeholders avoid paying annual ground rent or service charges that leaseholders are typically responsible for.

Property Value: Freehold properties tend to maintain or increase in value better than leasehold properties, making them a more attractive investment for long-term gains.

Leasehold: Ownership of the property for a fixed period, but not the land, and usually involves paying ground rent and service charges.

Commonhold: A form of ownership typically applied to flats, where each owner holds a freehold unit, and collectively, the owners manage common areas.

Title Deeds: Legal documents that prove ownership of the freehold property and land.

Advantages: Full ownership provides freedom and control over the property and land, with no need to worry about ground rent, service charges, or lease renewals. Freehold properties are generally easier to sell, and they hold their value better over time.

Disadvantages: Freeholders bear full responsibility for all property maintenance, which can involve significant costs. Freehold houses are typically more expensive to buy than leasehold flats.

Investors often prefer freehold properties for long-term investment due to the absence of additional charges like ground rent and the stability provided by full ownership. Freehold properties also tend to appreciate more consistently, providing stronger capital growth potential.

Scenario: An investor buys a freehold house in a growing neighborhood, confident that they will have full control over the property, with fewer external costs and restrictions compared to a leasehold property.

What is the main difference between freehold and leasehold?

Freehold means you own the property and the land outright, while leasehold means you own the property for a fixed term and must pay ground rent and service charges to the freeholder.

Is it better to buy a freehold property?

Many buyers prefer freehold properties due to the long-term ownership benefits, lack of ongoing fees, and more freedom over the property. However, freehold houses can be more expensive to purchase upfront.

In the UK, most houses are freehold, with over 80% of UK homes falling under this category. Freehold properties tend to maintain higher resale value compared to leasehold properties due to their long-term ownership benefits and lower ongoing costs.