Leasehold vs Freehold
Plain-English definition of Leasehold vs Freehold — part of our property glossary.
Definition
Freehold: you own the property and the land outright. Leasehold: you own a right to occupy the property for a fixed period (often 99 or 125 years). Most flats in England are leasehold; most houses are freehold. Short leases (under 80 years) become expensive to extend.
Worked example
A flat with 75 years remaining on a 99-year lease is near the "short lease" threshold. Extending typically costs £10,000–£30,000 in legal and freeholder premium costs, but unlocks the property for mainstream mortgage lenders and materially higher sale prices.
Why it matters
Property is the single largest financial transaction most households ever make, and small mistakes — a worse rate, a missed relief, the wrong structure — compound over 25–30 years. Fluent vocabulary is the difference between spotting a costly clause and signing it.
Common mistake
Assuming advertised rates apply to everyone. Loan-to-value bands, property type, and credit history all filter you into a narrower set of actual rates. Always price the deal for your specific LTV and property, not the headline teaser.
Calculators that use this concept
See also
- SDLT (Stamp Duty Land Tax) — Stamp Duty Land Tax is the UK tax on residential and commercial property purchases in England and Northern Ire…
- LTV (Loan-to-Value) — LTV is the mortgage amount expressed as a percentage of the property value. A £180,000 mortgage on a £200,000 …
- Offset Mortgage — A mortgage linked to a savings account: interest is charged only on the mortgage balance minus the savings bal…
- First-Time Buyer (FTB) — In UK property, a first-time buyer is someone who has never owned a residential property anywhere in the world…
- Help to Buy ISA (closed) — A government scheme closed to new entries in November 2019. Existing accounts still earn the 25% bonus on savi…