Nearly all flats and apartments in England and Wales are sold as leasehold, meaning you own the property for a fixed period but not the land it sits on. That single fact trips up more first-time buyers than almost anything else I’ve seen in the years I’ve been covering UK property. It means your ownership has an expiry date, and the clock is ticking from the day you move in.
If you’re looking at apartments, you need to understand the difference between leasehold and freehold before you make an offer. Get it wrong and you could end up with a property that’s hard to sell, expensive to maintain, or losing value every year. Get it right and you can lock in security and avoid nasty surprises. Here’s what you actually need to know.
What Leasehold and Freehold Actually Mean for Your Apartment
The most important thing to grasp is that leasehold isn’t renting — but it isn’t full ownership either. You own the flat itself, but the land belongs to a freeholder (sometimes called the landlord). That freeholder is responsible for the building’s structure and communal areas, and you pay them service charges to cover those costs. A freehold property, by contrast, means you own everything — the building and the land — with no time limit and no one above you.
I’ve seen buyers fall in love with a flat, only to discover the lease has 70 years left and the extension cost would run into five figures. That’s the kind of shock that kills a purchase. The rule of thumb I use is simple: if a lease has fewer than 90 years remaining, I’d want a solicitor to cost the extension before I even made an offer. You can get a property lawyer to check the lease terms early in the process — it’s money well spent.
Why the 2026 Leasehold Reforms Change Everything
The rules around leasehold have shifted significantly, and they matter most for anyone buying a flat right now. Under the old system, you had to own a property for two years before you could extend the lease, and the maximum extension was 90 years for flats. That created a nightmare scenario: if you bought a flat with a 75-year lease, you couldn’t do anything about it for two years, and by then the lease had dropped further, making the extension even more expensive.
From 2026, those restrictions are gone. Leaseholders can now extend their lease by up to 990 years and apply immediately after buying the property. That’s a massive change. It means a flat with a short lease is no longer the dead end it used to be — you can fix it straight away. The reforms also aim to reduce the extra costs that kick in when a lease drops below 80 years, something known as marriage value, which previously made extensions punishingly expensive.
What I’d do in your shoes: if you’re looking at a flat with a lease under 90 years, factor the extension cost into your budget before you make an offer. The new rules make it easier, but they don’t make it free. And if you’re comparing two similar flats, the one with the longer lease is still the safer bet — you won’t have to deal with the process at all.
Where Buyers Get Tripped Up on Leasehold Costs
The biggest mistake I see is people focusing only on the purchase price and ignoring the ongoing costs. Leasehold flats come with service charges, ground rent, and sometimes administration fees — and those can rise unpredictably. Freehold owners, by contrast, handle maintenance themselves, which gives them more control but also more responsibility.
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| Cost | Leasehold | Freehold |
|---|---|---|
| Ground rent | £0 on new leases; varies on older ones | None |
| Service charges | Shared — covers building insurance, communal areas, repairs | You pay directly for your own property |
| Major repairs | Freeholder organises and bills via service charge | You arrange and pay yourself |
| Lease extension | Cost varies by lease length; can be thousands | Not applicable |
Ignoring the service charge history
Service charges can double or triple without warning if the building needs major work. I always ask to see the last three years of service charge statements. If they’ve been rising faster than inflation, that’s a red flag. Some freeholders also charge administration fees for things like permission to sublet or make alterations — check the lease for those hidden extras. A tenant landlord lawyer can review the lease and flag any unusual clauses before you commit.
Assuming ground rent is always zero
New leases typically have a “peppercorn” ground rent — effectively £0. But older leases can still have ground rent that increases over time, sometimes doubling every few years. That can make the property harder to sell later. If you’re buying an older flat, check the ground rent clause carefully. If it escalates, factor that into your long-term costs.
Overlooking the freeholder’s reputation
Not all freeholders are the same. Some are professional management companies that respond quickly and keep the building in good shape. Others are absent or difficult to deal with. Ask the current owner or the estate agent who the freeholder is, and search online for reviews. A bad freeholder can make your life miserable, and you can’t easily change them.
Forgetting about estate management fees
Even some freehold properties on modern housing developments come with estate management fees for maintaining shared spaces like roads and green areas. These are sometimes called estate rentcharges. Don’t assume freehold means zero ongoing charges — check the small print.
How to Choose the Right Ownership Structure for Your Apartment
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Most flats in the UK are leasehold, so you may not have a choice. But if you’re comparing a leasehold flat with a freehold house, or if you’re looking at a new-build development that offers commonhold, here’s how to think about it.
Check the lease length before anything else
This is the single most important number on the lease. Anything above 90 years is generally fine. Below 80 years is a problem — even with the new reforms, the extension cost will be significant. Below 70 years and most lenders won’t give you a mortgage. My advice: get the lease length in writing from the seller’s solicitor before you make an offer, and ask your solicitor to cost the extension if it’s under 90 years. You can also use a financial advisor to model how the lease length affects the property’s resale value over time.
Understand what you’re paying for in service charges
Service charges cover building insurance, maintenance of communal areas, and repairs to the structure. Ask for a breakdown of what’s included and how increases are calculated. Some leases cap annual increases; others don’t. If the building has a lift, a concierge, or a gym, those services add cost. Decide whether you actually need them or whether you’d rather pay less and have fewer amenities.
Consider commonhold as an alternative
Commonhold is a newer form of ownership where you own your individual flat outright while sharing ownership of the building’s common areas with other residents. It’s like being a freeholder in a shared building. Commonhold is still rare in the UK, but it’s worth knowing about because it avoids many leasehold headaches — no ground rent, no freeholder, and residents control the management. If you’re buying a new-build development, ask whether commonhold is an option.
Plan for the long term
Leasehold flats can be excellent investments, but they require more planning than freehold houses. You need to budget for service charges, plan for potential major works, and keep an eye on the lease length. If you’re buying as a first home and plan to move in five to ten years, a leasehold flat with a long lease is perfectly fine. If you’re buying a retirement home, you might prefer a freehold house or a commonhold flat to avoid ongoing charges. For more on the full picture, read our guide on hidden costs of apartment ownership.
Frequently Asked Questions
Can I lose my leasehold flat if I don’t pay service charges? ▾
Does a 990-year lease extension cost the same as a 90-year one? ▾
Can I sell a flat with a short lease? ▾
What happens when a lease expires? ▾
Is commonhold the same as freehold? ▾
Can I challenge unreasonable service charges? ▾
The difference between leasehold and freehold comes down to one question: how much control do you want over your property, and how much ongoing cost are you willing to accept? Leasehold flats work well for millions of UK homeowners, but only when you go in with your eyes open. Check the lease length, understand the service charges, and know your rights under the new rules. If this was useful, you might also want to read How to Navigate Buying an Apartment in the UK.
Sources and Further Reading
Hidden Apartment Fees: The UK Buyer’s Guide to Costly Surprises — A deeper look at the service charges, ground rent, and other costs that catch buyers off guard.
Leasehold definition and types. Investopedia, 2024.
Freehold vs Leasehold: 2026 rules explained. Purplebricks, 2025.
