Freehold flat
A freehold flat is a flat in England and Wales where the individual unit is held on a freehold title rather than a leasehold granted by a building owner. True freehold flats are uncommon. The vast majority of flats are sold on a leasehold basis, with a freeholder owning the building and land and flat owners holding long leases, typically of 99, 125, or 999 years. Where a flat is described as freehold, it is important to establish which of three distinct ownership structures actually applies, as each carries different legal and mortgage implications.
The three structures that can be described as a freehold flat
True freehold flat (flying freehold). In some older converted properties, individual flats were sold with a freehold title to the specific unit. This creates a flying freehold, a freehold that overhangs or underlies another freehold property, because the flat owner holds their unit outright but does not own any part of the structure or land beneath or around it. The Law Society describes a flying freehold as a freehold property built over land that does not form part of the property, for instance, where a freehold flat projects above a shared passageway or sits above another owner's floor.
Flying freeholds are treated as a title defect by most mortgage lenders, because the legal framework for enforcing obligations between neighbouring freeholders, repairs, access, structural support, is weaker than the rights available under a lease. Most lenders apply a maximum threshold (commonly 20% of total floor area) before declining to lend, and many require flying freehold indemnity insurance as a condition of any mortgage offer. A true freehold flat can also be difficult to sell, since fewer lenders will support a buyer's purchase.
Share of freehold. This is the most common form of "freehold flat" ownership in practice. Each flat is still technically leasehold, but the leaseholders collectively own the freehold title to the building, usually through a residents' management company in which each flat owner holds a share. Share of freehold gives flat owners greater control over building management, service charges, and lease extension costs, without the mortgage and enforcement problems of a true flying freehold. It is not the same as owning a flat outright on a freehold basis: the individual leases remain in place and continue to govern the relationship between flat owners.
Commonhold. Commonhold is the third form of flat ownership, one that gives each flat owner outright freehold title to their unit while managing the common parts collectively through a commonhold association, without a freeholder above them. Introduced by the Commonhold and Leasehold Reform Act 2002, commonhold has been very rarely used in practice to date. That is now set to change, with the government having published the draft Commonhold and Leasehold Reform Bill in January 2026, which proposes to make commonhold the default tenure for new flats in England and Wales and to ban the sale of most new leasehold flats once the new framework is in place. The draft Bill is currently undergoing pre-legislative scrutiny in Parliament. GOV.UK sets out the detail of the proposed reforms.
Mortgage implications
The mortgageability of a freehold flat depends entirely on which structure applies. A share of freehold flat is generally mortgageable on mainstream terms, subject to normal lender criteria. Commonhold is also mortgageable where lenders have updated their policies, though some older policies remain behind the legislative changes. A true flying freehold flat presents the greatest mortgage challenge. Lenders assess each application individually, with many requiring the flying freehold element to represent no more than 20% of the total floor area, and most requiring indemnity insurance. Some lenders decline flying freeholds outright. This directly affects resale value and exit options, which matters to landlords considering the long-term investment case.
From working with self-managing landlords across the UK, August finds that the mortgage and resale implications of flying freeholds are frequently underestimated at the point of purchase. Landlords who buy on a cash basis may not discover the problem until they try to remortgage or sell to a buyer who needs finance.
Should you buy a freehold flat?
A well-structured freehold flat, one held through a properly constituted share of freehold arrangement or, in future, commonhold , can offer genuine advantages over standard leasehold ownership, including no ground rent, no lease running down in value, and greater control over building management. A poorly structured flying freehold, by contrast, can create persistent problems with mortgage finance, insurance, and enforcing repair obligations against neighbouring freeholders.
Before committing to any flat described as freehold, the key questions are:
which of the three structures applies,
will mainstream lenders mortgage it on current and future transactions,
how are building maintenance and insurance obligations enforced,
is there a management company or residents' association in place, and
what is the legal basis for cost-sharing between flat owners.
For a broader look at flats as buy-to-let investments, including yields, service charges, and leasehold risks, see our guide to buying a flat as a buy-to-let.
Buying the freehold of a leasehold flat
If you own a leasehold flat and want to acquire the freehold, the primary route is collective enfranchisement: leaseholders in a building join together to purchase the freehold from the freeholder, with at least half of the qualifying leaseholders required to participate. The Leasehold and Freehold Reform Act 2024 strengthened this process by removing the requirement to pay marriage value and expanding qualifying criteria. Our full guide to the Leasehold and Freehold Reform Act 2024 covers what changed and when.
Once the freehold is acquired collectively, the group sets up a residents' management company, typically a limited company in which each flat owner holds a share, which takes responsibility for building maintenance, insurance, and ground rent collection. This gives residents direct control but also direct legal and compliance responsibility for the building.
For rental yield, the lease term is material. A lease below 80 years increases the cost and complexity of any extension significantly, and affects a tenant's ability to sub-let or obtain mortgage finance. Participating in collective enfranchisement before the lease falls to that level is generally worth considering.
Frequently asked questions
Can a flat be freehold in the UK?
Yes, but true freehold flats, where the individual unit is held on a freehold title, are uncommon and often arise in older converted properties as a flying freehold. More commonly, a "freehold flat" refers to a share of freehold arrangement, where leaseholders collectively own the building's freehold through a management company. Commonhold is a third structure that gives true freehold ownership of individual flat units and is set to become the default for new flats under proposed government reforms.
Is a freehold flat hard to mortgage?
It depends on the structure. A share of freehold flat is generally mortgageable on mainstream terms. A true flying freehold flat is more challenging: many lenders apply a 20% floor-area threshold and require indemnity insurance, and some will not lend at all. Always establish which structure applies before instructing a solicitor or arranging a survey.
What is flying freehold indemnity insurance?
Flying freehold indemnity insurance protects the policyholder against financial loss arising from the legal defects associated with a flying freehold title, typically the absence of documented rights of support, access, or positive covenant enforcement against the neighbouring freeholder. The premium is usually a few hundred pounds, paid at completion. It does not resolve the underlying legal position, but it provides financial protection and is typically required by mortgage lenders as a condition of any offer.
