Leasehold

A form of property ownership where you own the property for a fixed period (the lease term) but not the land it stands on. The freeholder owns the land and charges ground rent and service charges. Most flats in England and Wales are leasehold. The Leasehold and Freehold Reform Act 2024 strengthened leaseholders' rights.

There are approximately 4.8 million leasehold homes in England. Leaseholders pay ground rent, service charges, and often a buildings insurance contribution to the freeholder or management company. The Leasehold Reform (Ground Rent) Act 2022 banned ground rent for new residential leases. The Leasehold and Freehold Reform Act 2024 made it easier and cheaper for leaseholders to extend their lease or buy the freehold (enfranchisement), and gave leaseholders greater rights over service charges and managing agents. Lease extensions can now be granted for 990 years at a peppercorn ground rent. Properties with a short lease (below 80 years) become harder to mortgage and sell; leaseholders should extend before the lease falls below 80 years to avoid the 'marriage value' premium. The First-tier Tribunal (Property Chamber) hears disputes about service charges and management.

Related terms

FreeholdService Charge (Property)Ground Rent

Related guides

Leasehold and Service Charge Disputes

Owning a leasehold property means owning the property for a fixed term while the freehold — the land — is owned by someone else (the freeholder or landlord). Leaseholders pay ground rent (now largely abolished for new leases) and service charges for the maintenance and management of the building. Disputes about service charges, management quality, and lease terms are common, but leaseholders have legal rights and access to the First-tier Tribunal (Property Chamber) to resolve them.

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