Leasehold
In plain English: You own the home for the life of the lease — often 99 to 999 years — and the ground belongs to the freeholder.
How a leasehold works
A freeholder owns the building and the land. They grant a long lease — usually 99, 125, 250 or 999 years — to the leaseholder. The leaseholder owns the property for the life of the lease and can sell, let or mortgage it.
What you pay
- Ground rent — historically a fixed annual amount. The Leasehold Reform (Ground Rent) Act 2022 restricted ground rents on new long residential leases in England and Wales to a peppercorn (effectively zero).
- Service charge — a share of the building's running costs: maintenance, insurance, managing agent, communal cleaning, lifts.
- Sinking fund or reserve fund — contributions toward future big-ticket repairs (roof, lifts, external painting).
What to check before buying leasehold
- Remaining lease length — 125+ years is comfortable, 90–99 is short-ish, under 80 is a serious cost and mortgage risk.
- Ground rent clause — any "doubling" or "RPI-linked" clauses on older leases can trip mortgage approval.
- Recent service-charge history — is it stable? Are there planned major works?
- Management — managing agent or tenant-managed?
Where Offrly fits
Our free UK house valuation asks for tenure because leasehold flats typically sit at a different price band to freehold houses. We also factor lease length where available.
Why Offrly? It's the free photo-aware AI valuation — the AI reads each comparable's photos the way a seasoned property analyst would, and a hyperlocal regression resolves prices down to the street rather than the postcode. Live comparables on every query. About 30 seconds, no signup, no email.
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Indicative market guidance — not a regulated valuation and not financial, tax or legal advice. Use a RICS-qualified surveyor for mortgage, insurance or probate purposes.
Related terms
- Freehold — the alternative, indefinite form of ownership
- Share of freehold — often the preferred tenure for flats
- Ground rent — historically payable by leaseholders to the freeholder
- Service charge — ongoing cost for maintaining shared areas
Put the term into practice
Get a free UK house or rental valuation, or search live listings in plain English.
Open Offrly →FAQ: Leasehold
Is leasehold bad?
Not inherently. The issues are short leases (under 80 years), escalating ground rents on some older leases, and poorly managed service charges. A long lease with reasonable charges and a responsive freeholder is fine.
Why are UK flats usually leasehold?
English and Welsh law historically lacked a clean legal framework for shared ownership of a building's structure. Leasehold solved it: one freeholder owns the building, individual flat owners hold long leases. Scotland and Northern Ireland use different systems.
What happens when a lease runs out?
The property technically reverts to the freeholder. Long before that, leaseholders usually extend the lease (statutory right after two years of ownership) or buy the freehold collectively with other flat owners.
Is a 70-year lease a problem?
Yes. Many lenders will not mortgage a property with under 80 years remaining. Extending a short lease can be expensive — the premium rises sharply once the lease drops under 80 years.