Leasehold vs freehold: what every UK buyer should know

The two-line summary

If you buy a freehold you own the building and the land it sits on, forever. If you buy a leasehold you own the right to occupy a property for a fixed number of years, after which it reverts to the freeholder. Most UK houses are freehold; most UK flats are leasehold.

The whole game of leasehold buying is reading the lease before you offer — and that is what most buyers do not do.

Why this matters before you offer

Three things in a lease decide whether the flat is a good buy:

1. Years remaining. Below 80 years and most lenders refuse to lend; below 70 years and lease extension costs jump sharply (the “marriage value” gate). A 99-year lease sold in 2010 is now a 84-year lease — close to the cliff edge.
2. Ground rent. A flat ground rent of £100/year is harmless. A “doubling” ground rent that goes from £250 to £8,000 over the lease term is a notorious bear trap and one of the reasons leasehold reform exists.
3. Service charge and major works. A £1,200/year service charge is normal. A £40,000 “section 20” notice for cladding remediation is not — but it has hit thousands of leaseholders since 2018.

A good due-diligence pass reads the lease before the offer goes in. Brilliant Move’s specialist for this — Dilly — surfaces all three flags on every leasehold property automatically.

Lease extension in plain English

Once you have owned the flat for two years, you can serve a Section 42 notice on the freeholder and statutorily extend the lease by 90 years, plus a peppercorn (zero) ground rent. The price depends on the years remaining: an 85-year lease is cheap to extend, a 75-year lease is expensive, a 65-year lease is painful.

The 2024 Leasehold and Freehold Reform Act removed the two-year wait and changed the valuation method, but most provisions have not commenced as of 2026. Treat the law as the pre-2024 regime until your solicitor tells you otherwise.

What to ask before offering

Three questions to your solicitor (or to Reggie):

• How many years remain on the lease? Sub-80 changes the offer; sub-70 changes the property.
• What is the ground rent and how does it review? Fixed, RPI-linked, and doubling are three very different worlds.
• Are there pending major works or a section 20 notice? A look at the management company’s last AGM minutes answers this.

If you cannot get clear answers in 48 hours, that is itself a flag. The freeholder’s responsiveness during the sale is a leading indicator of the next 10 years of your life.

Information only. This is not legal advice. Lease structures vary materially and your solicitor’s read of your lease is the only one that matters.