What Are Freehold, Share of Freehold, and Leasehold?

For those looking to purchase property in the UK for residential or investment purposes, the most commonly encountered ownership terms are Freehold, Share of Freehold, and Leasehold. These ownership structures determine what rights you acquire and for how long when purchasing a property.

Especially in major cities such as London, correctly understanding these concepts is crucial from both legal and financialperspectives.

Property Ownership Types You Should Know When Buying Real Estate in the UK

What Is Freehold?

Freehold means purchasing a property indefinitely, including both the building and the land it is built on. The entire property belongs to you outright.In Türkiye, this is most comparable to detached or standalone houses.

Key Features of Freehold:

• Ownership is perpetual (no time limit)

• Both the land and the building belong entirely to you

• No service charge or ground rent

• Internal modifications generally do not require permission

• Value-enhancing changes such as extensions, loft conversions, or structural enlargements are usually permitted

• Most commonly found in detached houses and townhouses in the UK

Advantages:

• The most secure ownership type for long-term holding

• Offers full control and flexibility

• Allows for property expansion and value appreciation

Disadvantages:

• Purchase prices are typically higher

• The owner is fully responsible for all maintenance and repairs(roof, foundations, insulation, landscaping, etc.)

Freehold is the most suitable option for buyers planning long-term residence or multi-generational investment.

What Is Leasehold?

Leasehold refers to purchasing the right to use a property for a fixed period of time. In the UK, the vast majority of apartments are sold as Leasehold.Common lease terms are 99, 125, or 999 years.

Key Features of Leasehold:

• Ownership is time-limited, but the lease can be extended

• Most modern developments offer 999-year leases

• The land is owned by the freeholder

• Properties built before 2022 may require payment of ground rent; this has been abolished for new developments

• Service charges are payable for communal areas and external maintenance

Advantages:

• More affordable purchase prices compared to Freehold

• Widely available in new-build developments

• Practical for investors, as responsibility is limited to the individual unit

• Greater availability in central and high-demand locations

Disadvantages:

• Limited control over service charge costs

• Lease extensions may involve significant costs

• Alterations and refurbishments often require freeholder approval

Important Note:If the remaining lease term falls below 80 years, serious issues may arise during mortgage approval and resale. Lease length must therefore be carefully reviewed before purchase.

What Is Share of Freehold?

Share of Freehold is an ownership structure where, in addition to owning a leasehold apartment, the buyer also owns a shared interest in the building’s freehold.

In this model, individual flats are held as Leasehold, while the building’s Freehold is jointly owned and managed by the flat owners, usually through a company.

Key Features of Share of Freehold:

• Long-term or effectively perpetual lease arrangements

• Ground rent is usually not charged

• Owners have a direct say in management decisions

• Service charges are generally more controlled

Advantages:

• Greater control over building management and costs compared to standard Leasehold

• Reduced dependence on an external freeholder

• Lease extension costs are minimal or negligible

Disadvantages:

• Shared decision-making can be time-consuming

• Management responsibilities are collective

• Commonly found in older, central London buildings

• Maintenance of façades, roofs, and structural elements can be expensive; sinking funds are therefore common

Share of Freehold is particularly common in boutique apartment buildings and high-value investment areas across London.

Which Ownership Type Is Right for You?

• For long-term residence and full control: Freehold

• For centrally located, low-maintenance investment: Leasehold

• For influence over building management: Share of Freehold

When investing in UK real estate, ownership structure is just as important as location and plays a critical role in the long-term success of the investment.Professional guidance, careful contract review, and alignment with your long-term goals are therefore essential throughout the purchasing process.