Leasehold Explained: Simple Facts for UK Home Buyers

If you’ve seen a property listed as ‘leasehold’ and felt a bit lost, you’re not alone. A leasehold home is owned for a set number of years, not forever. You own the building inside the walls, but the land belongs to someone else – the freeholder. This arrangement affects your mortgage, service charges, and what you can do with the property.

How Long Does a Lease Last?

Leases can be as short as 99 years or as long as 999 years. Most new builds come with a 99‑ or 125‑year lease. When the lease gets low – usually under 80 years – it can become harder to sell and more expensive to extend. Banks often refuse mortgages on very short leases, so keep an eye on the remaining term before you make an offer.

Extra Costs You Need to Know

Besides the purchase price, leasehold properties come with ongoing fees. The most common are service charges for building maintenance, cleaning, and insurance. You’ll also pay a ground rent to the freeholder, which can be a fixed amount or increase over time. If you want to extend the lease, you’ll need to pay a premium, and that cost can be steep if the lease is already low.

Before you sign anything, ask the seller for a breakdown of the last year’s service charges and ground rent. Compare them with other properties in the area – sometimes the fees are unusually high, and that could bite you later.

Another thing to watch is the ‘leasehold covenant’. This is a list of rules you must follow, like restrictions on pets, subletting, or making major alterations. Breaking these rules can lead to fines or legal trouble, so read them carefully.

Despite the extra costs, leasehold can be a good way to get into a desirable location without paying the full land price. It’s common for flats in city centres, where freehold land is scarce and expensive.

If you’re thinking about buying, here’s a quick checklist:

• Check the remaining lease term – aim for 80 years or more.
• Ask for recent service charge statements and ground rent details.
• Find out the cost and process for extending the lease.
• Read the lease covenants to see if any restrictions affect you.
• Talk to a solicitor who knows leasehold law – they can spot hidden pitfalls.

Getting a good solicitor can save you thousands in the long run. They’ll help you negotiate the price, understand the lease terms, and make sure the extension process is clear if you need it later.

In short, leasehold isn’t scary, but it does need a bit more homework than freehold. Know the length of the lease, the regular fees, and any rules that come with it. With the right info, you can decide if a leasehold property fits your budget and lifestyle.

Ready to start looking? Use the filters on our site to pick ‘leasehold’ and set the minimum lease term you’re comfortable with. That way you’ll only see homes that match your criteria and avoid wasting time on listings that won’t work for you.

Whether you’re a first‑time buyer or moving up the ladder, understanding leasehold basics puts you in control. It’s all about asking the right questions and getting clear answers before you sign.