Freehold, leasehold, and commonhold explained

Thinking about buying a home? Freehold, leasehold and commonhold are three different types of property ownership in the UK.

They affect what you own, what you're responsible for and what a lender will consider when you apply for a mortgage. They can also affect any ongoing costs and the changes you can make to your home.

In this guide, we explain how freehold, leasehold and commonhold work and what they mean for you as a homeowner. We’ll also compare the key differences and explain what to check before you buy.

What does “freehold” mean?

In simple terms, if you own a freehold property, you own both the property and the land it stands on outright.

There is no lease term, so your ownership doesn't have a set end date. Freehold is common for houses, and you'll usually be responsible for maintaining the property and land yourself.

How do mortgages on freehold properties work?

A mortgage on a freehold works in the same way as most residential mortgages. You borrow money from a lender to buy the property and the land it stands on, then repay the loan over an agreed term.

When assessing a freehold property, the lender won't need to consider lease length or lease terms. However, they may need to consider other details about the property, including any restrictions or unusual ownership arrangements.

As with any mortgage, whether you can borrow will depend on the property, the lender's criteria and your circumstances.

“Share of freehold” meaning

In some blocks of flats, the leaseholders also share ownership of the building itself. This is known as a "share of freehold".

The individual flats are still usually owned under separate leases, but the owners jointly own the freehold. This can give you more of a say in decisions such as how the building is managed and maintained.

You'll still need to check the lease for your individual flat, including any responsibilities or conditions that apply. A mortgage lender may also need to assess the lease, even though you own a share of the freehold.

What is a “flying freehold”?

A flying freehold is where part of one freehold property sits above or below another property or land that it doesn't own. This can happen in some older or terraced homes, for example where a room sits above a shared passageway.

Flying freeholds can make responsibilities for access, maintenance and repairs more complicated. Because of this, some lenders may need to check the ownership and legal arrangements before deciding whether to offer a mortgage.

What does “leasehold” mean?

A leasehold means you own the property for a set number of years under a lease. The lease is an agreement between you and the freeholder, who usually owns the building and the land it stands on.

Leasehold ownership is most common for flats and apartments. Leases are often granted for a long period, such as 99 or 125 years, although the length can vary. If you buy an existing leasehold property, you take on the remaining term of its lease. The number of years left reduces over time.

Your lease also sets out your rights and responsibilities, including any costs or restrictions that apply. For example, it may explain who is responsible for maintaining shared areas, what service charges you need to pay and whether you need permission to make certain changes to your home.

How does a leasehold property mortgage work?

A mortgage on a leasehold property works much like a mortgage on a freehold property. You borrow money to buy the property and repay it over an agreed term.

A key difference is that a lender will also check the lease to make sure it meets their lending criteria. They may consider:

Lease length: how many years are left on the lease.
Ongoing costs: such as ground rent and service charges.
Lease terms: including any conditions or restrictions that could affect the property.

Many leasehold properties can still be mortgaged in the usual way. However, it’s important to keep in mind that a short lease or certain lease terms could affect the mortgage options available to you.

Lease extensions

If you're a leaseholder, you may be able to extend the number of years left on your lease. A longer lease can help protect the property's value and may give you more mortgage options.

The cost and process of extending a lease can depend on your circumstances and the terms of the lease. Before buying a leasehold property, it's worth checking how many years are left and speaking to your solicitor or conveyancer about whether an extension may be needed.

What does “commonhold” mean?

Commonhold is another way of owning property in a building or development with shared areas, such as a block of flats.

You own your individual property – known as a commonhold unit – outright. Unlike leasehold, there is no lease that reduces in length over time.

All the owners are members of a commonhold association, which owns and manages the shared parts of the building or development. This could include areas such as hallways, roofs and gardens.

Commonhold currently exists in England and Wales, although it is much less common than leasehold. Because there are relatively few commonhold properties, fewer lenders currently offer mortgages for them. This may mean you have a smaller choice of mortgage products, so it’s worth checking your options early.

How are leasehold and commonhold rules changing?

The Leasehold and Freehold Reform Act 2024 introduced changes designed to give leaseholders more rights and change the process for extending a lease or buying a freehold. Some changes are already in place, while others are still being introduced.

The government has also published a draft Commonhold and Leasehold Reform Bill. The proposals include making commonhold easier to use and banning leasehold for most new flats in England and Wales. They also include further changes to ground rent and leaseholder protections. These proposals are not all law yet.

If you're buying a leasehold or commonhold property, check the latest government guidance and speak to your solicitor or conveyancer about what the rules mean for the property you're considering.

Freehold vs leasehold vs commonhold: key differences

The main differences between leasehold, commonhold and freehold relate to how the property is owned, the costs involved and the level of flexibility. Here’s a summary of what each type of ownership involves:

	Freehold	Leasehold	Commonhold
What you own	The property and land outright	The property for the remaining term of the lease	Your individual property outright
Time limit	No lease term	The lease lasts for a set number of years	No lease term
Property types	Common for houses	Common for flats	Designed for flats and other properties with shared areas
Shared areas	Depends on the property or development	Usually managed by the freeholder or managing agent	Managed through the commonhold association
Ongoing costs	You're usually responsible for maintaining your property and land. Charges may apply for shared services on some developments.	You may pay service charges and, depending on your lease, ground rent or other charges	You'll usually contribute towards the cost of maintaining and managing shared areas
Making changes	You can usually make changes, subject to planning rules and any restrictions on the property	You may need permission for some changes, depending on the terms of your lease	You own your home outright, but commonhold rules may apply to some changes
Mortgage considerations	There's no lease for the lender to assess, although other property checks still apply	Lenders may consider the lease length, costs and terms before deciding whether to lend	Fewer lenders currently offer commonhold mortgages, so your choice may be more limited

What should you consider when buying?

You may not always be able to choose between freehold, leasehold and commonhold, as the type of ownership depends on the property you're buying. Rather than thinking of one as better than another, focus on whether the ownership arrangements work for your needs and budget.

Before buying, check:

Type of ownership: what you'll own and whether there's a lease term.
Maintenance arrangements: who looks after the building and any shared areas.
Ongoing costs: what charges you may need to pay and what they cover.
Rules and restrictions: whether there are rules about making changes, keeping pets or renting out the property.

Your solicitor or conveyancer will check the legal ownership and can explain any terms or responsibilities you're unsure about.

How to find the right mortgage

No matter which type of property ownership comes with the home you choose, it’s important to find a mortgage that works for your circumstances.

The type of ownership can affect your mortgage options. Lenders may check whether the ownership arrangements could affect the property's value or make it harder to sell in the future, and criteria can vary between lenders.

When comparing mortgages, think about how much you can afford to borrow, the deposit you have and what you can comfortably repay each month. You should also compare interest rates, mortgage fees and the terms of each deal.

Ready to explore your options? View our range of mortgages and use our Mortgage Calculator to estimate what you could borrow.

For more mortgage advice, browse related articles below or visit our Mortgage Guides and FAQs hub.

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