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    Understanding Freehold Property Ownership: A Complete Overview

    By The reallymoving Team Updated 13th Mar, 2024

    Freehold is when you own the land as well as the property on it – here’s what you need to know.

    Understanding Freehold Property Ownership: A Complete Overview

    What does freehold mean?

    Freehold is the ownership of not only the property, but the land it sits upon. If you’re buying a house, it’s likely that it’s freehold, meaning you’re responsible for the drive and the garden. If you own a freehold property, it is yours until you sell it, there is no one else involved in your ownership, and few limitations on what you do with your land.

    What’s the alternative to freehold?

    The opposite of freehold is leasehold – this is where someone else owns the lease to the land your property sits on. This is often the case when buying a flat or apartment – you will buy the property, but pay a leaseholder a monthly or yearly fee to cover costs associated with the land. This could cover gardeners of communal areas, upkeep for lifts, cleaning for hallways and entrances.

    If you’ve been renting, you’ll be used to paying a service charge like this. A ground rent is another charge like this, which basically just covers paying the leaseholder.

    Leases are also limited by time, so if you buy a flat with fewer than 99 years left on the lease, you may need to renew the lease which can cost more down the line.

    There were also some recent scandals around leases that doubled in cost every year with some newbuilds – if you are buying a newbuild or leasehold, ensure your conveyancing solicitor is aware of these. Find out more about leaseholds in our leasehold guide.

    What are the advantages of freehold?

    Freehold is a lot simpler – you buy the home and everything associated with it is yours. You don’t have any ground rents or service charges. There is no countdown on a lease, and no one else is involved in your ownership.

    You have much more control over your land and your decisions. Some leasehold properties might have limitations on building work or even whether you can own pets. You don’t have this issue with freehold.

    What is share of freehold?

    In some cases, when buying a flat (which would usually be leasehold) you may be given the option to buy a share of the freehold. This means you split the freehold ownership between the flats in the property. In some cases this is preferable to leasehold, as it means all owners will be invested in the property and how it’s run, and you should have greater say over maintenance decisions and limitations. But it can mean more responsibility, with more conversations around these decisions with your fellow freeholders.

    What is flying freehold?

    A flying freehold is when you own the property but it sits above land you do not own. This could be a part of the property that is over a shared archway or communal entrance, or even a balcony that is over someone else’s land. You own the room, but not what’s beneath it.

    Flying freehold doesn’t have to be complicated, but your conveyancing solicitor needs to be aware of it. If you need to access a neighbour’s land, or there might be limitations on building/fixing that space, it’s worth knowing in advance. Most mortgage lenders will accept flying freehold as long as it’s only part of the whole purchase.

    Freehold vs Leasehold

    Freehold Leasehold
    More expensive sale price Cheaper initially but extra fees/service charge/renewal costs throughout
    Buy permanently May need to renew lease
    Complete control Some restrictions/permissions necessary (pets, subletting, building work)
    No additional extras as part of your purchase Additional extras (gym/car park/manicured gardens/cleaned communal areas)
    Responsibility for fixing the property Freeholder is responsible, but you may have to pay towards repairs.
    Own the land the property is on New build – freehold could be sold to third parties, ground rents and charges could increase
    Usually a house Usually a flat

    Freehold in Scotland (Feuhold)

    In Scotland, almost properties are freehold, known as ‘feuhold’. There are very few leasehold property. The buying process in Scotland is almost completely different to England, Wales and Northern Ireland, so if you are buying in Scotland, be sure to learn about the Scottish conveyancing process.

    Newbuild properties and leasehold issues

    A few years ago there was a lot of concern around newbuild houses being sold as leasehold without the buyer realizing. Houses are usually sold freehold, and the buyers and their solicitors seemingly missed this fact. The freehold was then sold to a third party, who doubled the ground rent every year, making it expensive to live in and impossible to sell. These cases, whilst rare, have been well documented and both conveyancers and buyers are a lot more dedicated when it comes to checking the paperwork around a newbuild house sale.
    Whilst freehold can seem like it has a lot of advantages, they do come at a premium. The lack of extra charges, the control over your space and what you do with it are brilliant, but houses and freehold properties tend to cost more. It’s also worth considering that if you’re not buying your ‘forever’ home, and you are excited to buy in a space that has leaseholder perks like communal pool/gym etc then a leasehold can be ideal.

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