Home Property What is a Freehold?

What is a Freehold?


Freeholding is usually the much preferred option when it comes to buying property, and for good reason! With numerous benefits to choosing a freehold over a leasehold, you really can’t go wrong. Keep reading this comprehensive guide to find out all you need to know about freeholds and why one could be right for you!

Freehold VS Leasehold

Freeholding is a type of tenure for land and property. If you own a freehold, you own the building and land it stands on outright. It is your name in the land registry and you own the “title absolute”. The term ‘freehold’ can also be used as a verb to describe what happens when you purchase your property – ie. what you do with it once you own it.

When you buy a freehold, you are responsible for all building costs such as repairs or building insurance. Usually it is unlikely you will acquire many charges in a freehold, unless you share any services like communal gardens with your neighbours. You also have the responsibility for maintaining things like the roof and the outside walls.

Leaseholding means that you simply have a contracted lease from the freeholder (AKA landlord) and lease the home for a number of years. A leasehold is the temporary possession of a property under a legal agreement, whereas a freehold is the complete ownership of a home without a time restriction. Leaseholds are usually long term, but they can also be shortened according to specific needs. The problem is, when you buy a leasehold, you don’t own the property outright, which can have many drawbacks.

Some of the key drawbacks to owning a leasehold are:

  • Leaseholders Pay Maintenance Fees, annual service charges and their share of the buildings insurance.
  • Leaseholders Pay Ground Rent to the freeholder.
  • Leaseholders Need Permission To Amend Their Property explicitly from their freeholder, or they could face additional charges.
  • Leaseholders Are Often Restricted with rules and regulations such as not being able to own pets or sublet.
  • Leases Can Become Forfeit if leaseholders don’t fulfil the terms of the lease.

Benefits of a Freehold

There are many reasons to buy a freehold. A freehold gives absolute title to the property owner and it cannot be taken away as long as they pay what they owe on time. The rights of a freehold owner are what makes the title so significant, as freehold owners have the right to do whatever they want with their land, as long as they own it. They can build what they want on the property, remove what they don’t want from it, and sell what they have at any time without having to ask for permission.

Additionally, many benefits exist for those looking to start a family as a freeholder, including the ability to pass on your property to future generations without going through any legal hoops. You may also choose to sell or rent out part of the property if that is what you wish. In terms of taxes, you are required only to pay rates on what you own.

Owning a freehold generally benefits everyone except renters, who do not get to take advantage of any benefits that come with owning property.

Other benefits of a Freehold include:

  • Increasing the Value of Your Property
  • No Ground Rent
  • Taking Control of Building Management
  • Reduced Risk of Losing the Property
  • Avoiding the Potential Risks of a Leasehold

How Do I Know If a Property is a Freehold?

Most houses are sold as freeholds, but it’s always important to check this. Whole houses are especially usually sold as a freehold, as there would be little reason for a standalone property to require a leasehold. However, leaseholds have been creeping back in some places, so we always recommend double checking exactly what type of tenure the property of interest is. You can simply ask your adviser or agent to clarify this for you.

Owning a Share of a Freehold

In some properties, like blocks of flats, multiple leaseholders may want to buy the freehold for their building and each own a share of that freehold. To do this, more than half of the leaseholders in the building must agree to buy the freehold. Usually this is done by the creation of a small company that manages the freehold, and each leaseholder owning a share of that company. Though not all freeholders of blocks of flats will be interested in selling their freehold, it is something that could be considered if enough of the property leaseholders got on board. Before rushing into this, make sure to thoroughly do your research and learn all there is to know about buying the freehold of a flat.

Top tip: be sure to avoid tax traps like this one if you do decide to go ahead with a tenant-owned flat management company.


So, now that we’ve covered the ins and outs of freeholding and the potential benefits it could offer in comparison to a leasehold, why not get started? Or if you think you need a little more explanation first, check out this handy video explaining Freeholds vs Leaseholds! Happy Freeholding!


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