Conveyancing

Freehold ownership means that the building and the land it stands on are both owned outright, and this is the case for most houses. A freehold owner is solely responsible for maintaining the interior and exterior of their home and grounds. There is also a lot more freedom over the use, improvements and additions to the property. Importantly, no ground rent is payable, and the property owner arranges their own buildings and contents insurance.

Leasehold ownership means that the main building and the land it stands on are both owned by the freeholder. As a leaseholder, you will own the right to live in part of the building (usually a flat) for a set number of years, subject to certain conditions. The landlord and/or management company is responsible for maintaining the communal areas, main structure and grounds, and you will pay for a proportion of these works via the service charge. You are responsible for maintaining the interior of your property. Use, improvements and additions are restricted by the terms of the lease and are often subject to permission from the landlord. You may also have to pay ground rent depending on the lease, and the landlord/management company arranges the buildings insurance; the costs of which are passed to you under the service charge.

The day of completion is the exciting day where the buyer’s solicitor pays the completion monies to the seller’s solicitor and, in return, the seller’s solicitor releases the keys. This means that the buyer can collect the keys and move into their new home. The buyer’s solicitor then pays the stamp duty to HMRC and starts to prepare the application to register the new buyer’s ownership at HM Land Registry. The seller’s solicitor redeems any existing mortgage, settles the estate agent’s fees and returns the balance of sale proceeds to the seller.

As a leaseholder, you have the right to live in the property for a defined number of years. This number will be determined by the unexpired term of the lease which will reduce as time passes by. At some point, the remaining term will reduce to a point at which it may have a negative effect on the value of the property, its saleability or ability to obtain a mortgage. Extending the lease means that these problems can be avoided. Where the freehold has been bought and you have received a ‘share of the freehold’, this means that you can avoid paying a high premium which could be set by an external landlord for granting a lease extension. Importantly, this does not ordinarily mean that you own a freehold flat.

An approximate timescale for a straight-forward freehold property purchase would be around 12 weeks. There are many factors which can impact the timescale of a transaction including response times from third parties, availability of documentation and information, title issues, problems flagged in a building survey or dealing with mortgage lender queries. The purchase of a leasehold property also requires further work to consider the lease and how the property is managed by the landlord/management company and tend to require more time to complete.

A lease may be extended by exercising your statutory rights or by private negotiation with the landlord. At present, the legislation which governs leasehold property and lease extensions is in the process of being revised by the Government and various sections of the Leasehold and Freehold Reform Act 2024 are due to come into force over the coming years. Most recently, the requirement to have owned your property for two years before looking to extend your lease under statutory rights was abolished in January 2025.