Who owns the land your property is built on? Freehold, leasehold and commonhold explained.

When you're searching for a new home, it's easy to focus on the details you can see: the asking price, the photos, the size of the garden or whether there's enough room for a home office.

But there's another detail hidden in every property listing that can have a major impact on your ownership experience: who owns the land the property is built on.

Whether a home is freehold, leasehold or commonhold can affect everything from ongoing costs and future property value to the changes you're allowed to make and even how easy it is to get a mortgage.

That's why understanding a property's ownership type is just as important as considering its location or price.

In this guide, we'll explain the differences between freehold, leasehold and commonhold ownership, along with some of the advantages, disadvantages and potential pitfalls buyers should be aware of before making an offer.

Freehold

What does freehold mean?

A freehold property is one where you own both the building and the land it stands on indefinitely. Unlike a leasehold property, there is no time limit on your ownership, meaning you can live in, sell or pass on the property without needing to renew a lease.

Freehold ownership is often seen as the simplest form of property ownership because there is no landlord or freeholder involved. As the owner, you're responsible for maintaining the property and land, but you also have greater control over how it's used, subject to planning permission and any legal restrictions attached to the title.

Pros of buying a freehold property

• Own the property and the land it stands on.
• No lease to expire.
• No ground rent or service charges in most cases.
  • In the UK, you may still need to contribute to maintenance costs on unadopted roads or footpaths or where you have shared communal facilities managed by a private company.

• More freedom to improve or alter your home.
  • You can make some changes under Permitted Development Rights but larger home improvement projects may still require planning permission.

• Usually simpler to sell or remortgage.
• Can be passed on as an inheritance without lease concerns.

Did you know…?

Even if you own a freehold property, some new builds and modern estates require homeowners to pay estate management charges for the upkeep of shared spaces and facilities.

Check whether an Estate Rentcharge applies to the property and understand what you're paying for, how charges can increase over time and whether any restrictions apply.

Cons of buying a freehold property

• Responsible for all maintenance and repairs.
• Often more expensive to buy.
• Boundary or access disputes can occur.
• Some freehold properties can still be difficult to mortgage.

Flying freeholds

A flying freehold is a property where part of the building extends over or beneath land owned by somebody else. For example, part of a rear extension or loft conversion may extend above a neighbouring property.

While flying freeholds are perfectly legal and surprisingly common, they can sometimes make it harder to get a mortgage.

Our latest report on the 1.5 million UK homes left behind by lending found that some lenders place limits on the proportion of a property that can comprise a flying freehold, which can affect mortgage availability. However, specialist lenders may be able to consider properties that fall outside mainstream criteria.

Leasehold

What does leasehold mean?

A leasehold property is one where you own the right to live in and use a property for a fixed period, but not the land it stands on. The land remains owned by the freeholder.

Leasehold properties are most common in flats and apartments, although some houses are also sold on a leasehold basis. Depending on the terms of the lease, you may need to pay ground rent, service charges or maintenance fees.

The number of years remaining on a lease can affect a property's value, saleability and mortgage options, which is why it's important to understand the lease terms before making an offer.

Pros of buying a leasehold property

• Often more affordable than an equivalent freehold property.
• This can be great for getting onto the property ladder, buying a larger home or moving to a more attractive area. Just be aware of any additional charges.
• Commonly used for flats and apartments.
• Maintenance of communal areas is usually managed on your behalf.
• For example, if there’s an issue with a car park gate or the intercom on the front door of a block of flats.
• Buildings insurance may be arranged through the freeholder or management company.
• Leaseholders have legal rights and protections.

Cons of buying a leasehold property

• You don’t own the land the property is built on.
• Ground rent, service charges and maintenance fees may apply.
• Some alterations may require permission from the freeholder.
• Most leases will include a clause restricting any structural changes to the interior or exterior of the property without prior written approval from the freeholder.
• Disputes can arise over service charges or property management.
• A short lease can make the property harder to sell or remortgage.
• Lease extension costs can increase as the lease term gets shorter.

Short leases

In the cons section, we mentioned that a short lease can cause issues when it comes time to sell or remortgage a property. This is because the value of a leasehold property can reduce as the number of years remaining on the lease falls.

Many buyers, lenders and surveyors pay close attention once a lease approaches the 80-year mark. This is because lease extension costs can increase significantly and some lenders may become more cautious about offering a mortgage.

As a result, properties with shorter leases can sometimes take longer to sell, attract fewer buyers or require the lease to be extended before a mortgage is approved.

Changes could be on the way. Current leasehold reform proposals include 990-year lease extensions, the removal of ‘marriage value’ (an expensive premium that homeowners need to pay to extend a lease with 80 years or fewer left on it) and measures designed to make extending a lease simpler and more affordable. However, these proposals are not yet in force.

In the meantime, Some specialist lenders, including Together, may be able to consider cases that fall outside standard lending criteria, subject to lending policy and individual assessment.

Commonhold

What does commonhold mean?

A commonhold property is one where you own your home and a share of the building's communal areas indefinitely. Unlike leasehold ownership, there is no lease to expire and no freeholder who owns the land or building above you. Instead, the owners collectively manage the development through a commonhold association.

Commonhold is most associated with flats and apartment buildings, where residents jointly own and manage shared areas such as corridors, lifts, roofs and gardens. This gives homeowners a greater say in how their building is run and how shared costs are spent.

Although commonhold has existed in England and Wales since 2002, take-up has been relatively low compared to leasehold ownership. However, that could change as the government looks to make commonhold the preferred ownership model for flats in the future.

Pros of buying a commonhold property

• No lease to expire.
• No ground rent.
• Own your property indefinitely.
• Greater control over how the building is managed.
• Residents have a say in decisions affecting shared areas and costs.
• No need to pay for future lease extensions.

Cons of buying a commonhold property

• You share responsibility for managing the building with other owners.
• Disagreements can arise over maintenance, budgets or improvements.
• You may need to contribute towards major repair projects.
• Commonhold properties are still relatively uncommon.
• Some buyers, lenders and professionals have less experience with commonhold arrangements than leasehold properties.

Commonhold reform

The government has stated its intention to make commonhold the default ownership model for flats and has published a draft Commonhold and Leasehold Reform Bill that would make it easier for existing leaseholders to convert to commonhold and ban the use of leasehold for most new flats. However, these proposals are not yet law.

If implemented, the reforms could significantly change how flats are owned and managed in England and Wales, reducing reliance on the traditional leasehold model while giving homeowners greater control over their buildings and shared costs.

Summary

Understanding whether a property is freehold, leasehold or commonhold is an important part of understanding what you're actually buying. Ownership type can affect everything from ongoing costs and home improvements to mortgage options and future property value.

Before making an offer, take the time to understand the property's ownership structure, any associated costs and any restrictions that may apply.

Need a mortgage for a property that falls outside standard lending criteria?

Whether you're buying a property with a flying freehold, a short lease or another ownership-related complication, Together may be able to help.