The essentials in 30 seconds
With leasehold, GOV.UK says you own the property for a fixed period of time, set in a lease with the landlord, also called the freeholder; ownership returns to the landlord when the lease ends. The government's toolkit adds that you own the right to occupy the home, but not the land it sits on. Most flats are leasehold, and around 5 million homes in England and Wales are. Leaseholders may pay ground rent, service charges and building insurance through the landlord, and need to follow the lease's conditions, for example on alterations. With freehold, you own the property indefinitely. Share of freehold means the flat owners together own the freehold, each keeping a lease, and commonhold is a form of freehold for flats run by a commonhold association of the owners. A draft Bill published in January 2026 would cap existing ground rents at £250 a year and ban leasehold for most new flats, but it is not law yet.
- Check the years left on a lease before you buy: extending gets much more expensive at 80 years or less.
- Ask for the ground rent, service charge and reserve fund details.
Freehold vs leasehold: the main differences
| Leasehold | Freehold | Share of freehold | Commonhold | |
|---|---|---|---|---|
| What you own | The home for a fixed period under a lease, not the land | The property and land, indefinitely | A leasehold flat plus a share in the company or group owning the freehold | Your unit as a freehold, indefinitely |
| Typical homes | Most flats; houses too, usually if bought through shared ownership | Houses not sold as leasehold | Flats whose leaseholders bought the freehold | Flats and shared buildings; take-up so far low |
| Who owns the building | The landlord (freeholder) | You | The flat owners together | The commonhold association owns the common parts |
| Ground rent | Possible, depending on the lease | No | Depends on the lease | No lease, so no ground rent |
| Time limit | Yes, the lease term | No | Yes, each flat's lease term | No |
What does leasehold mean?
Your lease is a legal agreement that sets how many years you own the home and the conditions you agree to, GOV.UK explains, for example:
- whether you need permission to make alterations;
- how much you pay to maintain the property;
- whether you or the landlord is responsible for repairs and dealing with noisy neighbours.
Breaking the conditions can lead to court action. Your rights include getting information about service charges and insurance, knowing the landlord's name and address, being consulted about certain maintenance costs and challenging certain charges.
Ground rent, service charges and insurance
| Cost | What the rules say |
|---|---|
| Ground rent | A payment to the landlord set by the lease, with no service in return. For leases granted on or after 30 June 2022, usually no more than a "peppercorn", worth zero. Older leases keep their ground rent, and it is payable once the landlord sends a formal written demand |
| Service charge | Set by the lease. You can ask for a summary of how it is worked out and see receipts |
| Building insurance | Usually arranged by the landlord and included in the service charge; you can ask for a summary and challenge an unreasonable cost at a tribunal |
| Reserve or sinking fund | Money for future repairs such as a new roof; usually not refunded when you move |
| Major works | You must be consulted (Section 20) about planned work costing you more than £250, or long-term services over £100 a year |
Why the years left on a lease matter
You can ask the landlord to extend the lease at any time, but GOV.UK warns that when 80 years or less remain, the cost increases significantly. If you qualify, you may extend by 90 years on a flat or 50 years on a house. The Leasehold Advisory Service has a calculator for flats. Since January 2025, you no longer need to have owned the home for two years before claiming a lease extension or buying the freehold. When a lease runs out, you do not automatically have to leave, but you have fewer rights, so get urgent advice.
Commonhold vs leasehold
Commonhold has existed in England and Wales since 2002. You own your flat (a unit) as a freehold indefinitely, and all unit owners can be members of the commonhold association, which owns and manages the common parts such as the roof, external walls, stairs and lifts. It has at least two directors, and its rules are set in the Commonhold Community Statement. Owners can vote on directors and improvements. Take-up has been low so far, but the government calls commonhold the future of flat ownership.
What has changed and what is still proposed
| Measure | Status |
|---|---|
| No 2-year wait before a lease extension or freehold purchase | In force since January 2025 |
| Right to Manage easier and cheaper | In force since March 2025 |
| Long leases no longer assured tenancies, whatever the ground rent | In force since 27 December 2025 |
| Ban on new leasehold houses | In the 2024 Act, still to be implemented |
| Cheaper lease extensions and freehold purchases under the 2024 Act | Need fixes through new primary legislation first |
| £250 a year cap on existing ground rents, falling to a peppercorn after 40 years | Draft Bill (January 2026), not law |
| Ban on leasehold for most new flats; commonhold as the default | Draft Bill and consultation, not law |
| Forfeiture replaced by a new enforcement scheme | Draft Bill, not law |
As of 2 November 2026, the Commonhold and Leasehold Reform Bill had not been introduced to Parliament, according to the UK Parliament bills register.
Is a leaseholder a tenant?
A leaseholder owns the home for the term of a long lease; a tenant rents it under a tenancy. Since 27 December 2025, long leases of over 21 years no longer count as assured tenancies, which the government says removes the risk of leaseholders being treated like private tenants.
Freehold vs leasehold: frequently asked questions
What is the difference between freehold and leasehold?
With leasehold, you own the home for a fixed period under a lease, but not the land. With freehold, you own the property and land indefinitely.
Is leasehold bad?
Not necessarily, but check the years left, ground rent, service charges and lease conditions before buying, and get legal advice.
What is share of freehold?
The flat owners jointly own the building's freehold, while each keeps a lease on their own flat.
What is commonhold?
Freehold ownership of a flat, with the building run by a commonhold association of all the owners and no lease.
Is ground rent being capped at £250?
It is proposed in the draft Commonhold and Leasehold Reform Bill of January 2026, which is not yet law.
Can I buy the freehold of my flat?
Usually together with the other leaseholders, as a share of the freehold. Contact the Leasehold Advisory Service for advice.
Sources
Official sources, checked on 2 November 2026 (02/11/2026).
- GOV.UK · Leasehold property ↗Fixed period under a lease; landlord or freeholder; most flats leasehold; responsibilities and rights; ground rent and the 30 June 2022 peppercorn rule; service charges, insurance, reserve funds and Section 20 consultation; lease extension at any time, 80-year point, 90 and 50 years; lease expiry; buying the freehold, share of freehold, right of first refusal; Right to Manage; disputes and tribunals.
- GOV.UK · Leasehold toolkit: England (20 May 2026) ↗Leasehold as a right to occupy for a set time but not the land; around 5 million leasehold homes; changes in force (2-year rule, Right to Manage, assured tenancies from 27 December 2025); measures still to come; enfranchisement fixes; leasehold house and flat bans; draft Bill measures; commonhold.
- GOV.UK · Commonhold property ↗Freehold ownership of flats indefinitely; since 2002; low take-up; unit owners and commonhold association; at least two directors; Commonhold Community Statement.
- GOV.UK · Draft Commonhold and Leasehold Reform Bill ↗Published 27 January 2026; ground rent cap of £250 a year changing to a peppercorn after 40 years; abolition of forfeiture; ban on leasehold for most new flats; easier conversion to commonhold; pre-legislative scrutiny.
- UK Parliament · Bills before Parliament ↗Searched for "commonhold" and "leasehold" on 2 November 2026: no Commonhold and Leasehold Reform Bill introduced; Leasehold and Freehold Reform Act 2024 has Royal Assent.
Buying a leasehold flat?
Ask for the years left on the lease, the ground rent, the last service charge accounts and the reserve fund, and get a solicitor to check the lease.