Freehold

Freehold is the most complete form of property ownership recognised in English law. Under the Law of Property Act 1925, a freehold estate is an interest in land held for an indefinite duration, meaning the owner holds both the building and the land it stands on outright, with no lease term, no superior landlord above them, and no fixed point at which ownership reverts to anyone else.

In practice, most houses in England and Wales are sold freehold. Most flats are sold leasehold, where the flat owner holds a time-limited interest from the freeholder who retains ownership of the building and land.

Freehold vs leasehold: the core difference

A freehold owner holds both the building and the land indefinitely. A leasehold owner holds only a time-limited right to occupy, granted by the freeholder under a lease that runs for a set term, commonly 99, 125, or 999 years, and is subject to ground rent, service charges, and lease covenants. In a building containing multiple flats, leasehold and freehold often coexist: the freeholder owns the structure and land; the leaseholders own their flats for the duration of their respective leases.

Houses and flats: which tenure applies

Most detached, semi-detached, and terraced houses in England and Wales are freehold. Most flats are leasehold, because the legal framework for shared buildings, where multiple owners each hold a unit within the same structure, has historically relied on the lease to govern the relationship between unit owners and the building owner. The Leasehold and Freehold Reform Act 2024 has begun to shift this balance, making commonhold a viable alternative for new flat developments, though leasehold remains the dominant tenure for existing flats.

Freeholder responsibilities

The person who holds the freehold is the freeholder, who sits at the top of the ownership chain in any building containing multiple tenures. As a freehold landlord who lets directly to residential tenants, you are responsible for the structure and fabric of the building, any communal areas, buildings insurance, and building-wide compliance obligations, including gas safety, electrical installation condition reports, and any HMO licensing requirements that apply.

From working with self-managing landlords across the UK, August sees freehold landlords consistently underestimate the building compliance obligations that attach to the structure itself, as opposed to the individual tenancy. Assured tenancy obligations, deposits, rent increases, possession grounds, and the full framework introduced by the Renters' Rights Act, sit on top of those structural responsibilities, not instead of them. Landlords who self-manage freehold properties can use August to track both compliance obligations and tenancy management in one place.

Share of freehold

Where leaseholders in a building collectively own the freehold title, usually through a management company they set up, each flat owner holds a share of the freehold. This gives them greater control over building management, service charges, and lease extension costs. The process by which leaseholders acquire the freehold collectively is called collective enfranchisement. The Leasehold and Freehold Reform Act 2024 made significant changes to how leaseholders can extend their leases and buy the freehold, our full guide covers what changed and when.

Freehold flats are a distinct and more complex structure, involving flying freeholds or commonhold ownership. See our definition of a freehold flat for detail on how these work and what to check before buying.

Legislation

Freehold estates in England and Wales are defined and governed by the Law of Property Act 1925, which consolidated earlier land law and established the framework for how land is bought, sold, and held. HM Land Registry records the freehold title in the registered title for each property, along with any charges, covenants, or restrictions that bind the land.

The Leasehold and Freehold Reform Act 2024, which received Royal Assent in May 2024, strengthened leaseholders' rights to extend their leases and purchase the freehold, and restricted new residential ground rents. The Act does not alter the nature of freehold ownership itself, but it changes the landscape within which freeholders and leaseholders interact.

Frequently asked questions

Is freehold better than leasehold for landlords?

For landlords letting houses, freehold is straightforwardly simpler: you own the building and land outright, there is no superior landlord to deal with, and your obligations run directly between you and your tenants. For landlords letting flats, the question is more nuanced. A leasehold flat can be a productive investment, but it comes with lease management costs, service charges, and the risk of a lease shortening in value. A share of freehold flat removes some of those risks by putting management in the hands of the leaseholders themselves.

What is the difference between freehold and share of freehold?

Freehold means one person or entity owns the building and land outright. Share of freehold means a group of leaseholders have collectively acquired the freehold title and each holds a share in it, usually through a management company. Under a share of freehold structure, each flat is still technically leasehold, the flat owners are both leaseholders and, through their share, freeholders of the building.

Can a leaseholder buy the freehold?

Yes. Leaseholders of houses can exercise the right to enfranchisement individually under leasehold reform legislation. Leaseholders of flats can pursue collective enfranchisement as a group, provided at least half the qualifying leaseholders in the building agree and the building meets the statutory qualifying criteria. GOV.UK sets out the current steps for buying the freehold of a leasehold property.