There are two main types of legal ownership in England and
Wales; Freehold and Leasehold. There are some key differences
to consider before committing to a purchase of either type.
What is Freehold?
If you own the freehold, it means that you own
the building and the land it stands on outright. It
will be your name in the land registry and on the
title deeds. Freehold is pretty much always the
preferred option and houses are normally sold
What is Leasehold?
Leasehold means that you have a lease from the
freeholder to use the home for a number of years.
The leases are usually long term — often 90 years
or 120 years. They can be as high as 999 years
which is also referred to as long leaseholds. When
the lease ends, ownership returns to the freeholder
unless you are able to extend the lease.
Most flats and maisonettes are owned leasehold,
however there are some exceptions to the rule in
Scarborough, where some flats are freehold.
When you buy a leasehold property, you’ll take
over the lease from the previous owner, so before
making an offer you’ll need to consider:
• How many years are left on the lease and
how it may affect obtaining a mortgage/the
property resale value.
• The service charges and related costs that
come with a leasehold property (which are
more than likely changeable rather than fixed)
• If you want to carry out Major works to the
property, as you’ll have to get permission.
What are the Conveyancing differences for Leasehold vs Freehold?
Each Conveyancing case is different, however
there are some key reasons why a Leasehold
case involves more work than a Freehold case.
The Conveyancing process for Leasehold cases
typically takes longer and carries higher costs
due to the amount of work involved. Here is a list
of the additional work required on a Leasehold
case (please note this list is not exhaustive).
Your Conveyancing Supplier
needs to read the Lease
Leases are complex documents which include
a lot of important information. If you’re getting a
mortgage, the Conveyancer must ensure that the
lease meets with the lender’s requirements and is
The unexpired term of the Lease
It is essential that your Conveyancer checks the
length of the unexpired term of the lease because
many lenders will not provide a mortgage if a
lease has less than 60-65 years left to run after
the end of the mortgage term.
Finding out who owns the Freehold
and requesting information
Your Conveyancer will need to request certain
information from the freeholder in the form of a
leasehold questionnaire and this may take time.
For example, your Conveyancer will check the
responsibilities on communal areas.
Sometimes, the owners of the leasehold
properties get together, buy the freehold and
form a Management Company to take care
of the upkeep and insurance of the property.
Your Conveyancer will check the company
documents and accounts and the share(s)
must be transferred on completion.
The lease contains Covenants which are
promises that the owner of the lease is obliged
to fulfil. Your Conveyancer will inform what
Covenants you must take responsibility of upon
Your Conveyancer will contact the owner of the
Freehold to find out what the current monthly
service charges are/check what has been paid to
date. Service charges cover the contributions to
the upkeep of communal areas. They also need
to find out if there is any major work planned
and whether or not there are funds available for
this expense. Your Conveyancer usually looks at
the expenditure of the management company
and freeholder over the last 3 to 5 years to see if
there has been any major expenditure or any debt
incurred. This information should be passed on to
you so that you can budget.
Buildings Insurance Policy
Your Conveyancer will check that the owner of
the freehold/ management Company has insured
the building and checks if there is a covenant in
the lease obliging the lessee to pay their portion
of the sum.
Your Conveyancer will try and find out if there are
any disputes between neighbours, the landlord
and or management company.
If required, your Conveyancer will get involved in
obtaining a lease extension or a brand new lease.