Leasehold vs freehold – what’s the difference?

When it comes to purchasing a new home, it’s important that the buyer understands all of the implications and costs that come with it.

Freehold and leasehold are two terms that we find that some – particularly first time – buyers don’t understand. But it can mean the difference between owning your home outright and having a ‘landlord’ – so it’s imperative to understand these two types of legal ownership.

So what are they, and what do they mean for a buyer?


If you buy a ‘freehold’ property, it will mean that you own the building and the land that it stands on outright, and your name will appear on the land registry. Freehold ownership is most common when buying a ‘whole’ house.

So what does it mean?

      • You won’t have to pay annual ground rents
    •  You will have full responsibility to maintain the building, its external walls and roof.



Leasehold, on the contrary to freehold, is where the property owner will ‘lease’ the land from the freeholder. The lease is usually long term i.e. anything from 99 – 120 years, however, they can sometimes be as short as 40 years.

A leasehold term is compulsory for shared buildings such as apartments and split properties.

So what does it mean?

  • The leaseholder and freeholder will set out a contract to outline the legal responsibilities of each party
  • The leaseholder will usually have to pay annual fees, such as ground rent, property maintenance fees and their share of building insurance
  • The leaseholder will have to obtain permission from the freeholder to carry out major works on the property.

Empire Works, our latest development, will include 24 apartments that fall under leasehold ownership. So, if you’re thinking about buying an SB Homes property, here’s what to expect:

    • While ‘ground rents’ can range from £100 up to £1000 per year, typical ground rents for properties bought from SB Homes are around £150 per annum
    • Our standard leases are 250 years to give our buyers the peace of mind they require when they’re purchasing a new home
    • Rather than charging our leasehold buyers extortionate management fees to maintain the building and its land and to clean the communal areas, we make each leaseholder a director of the management company. This way, each property owner has a say in and control over the decisions that will affect them.


If you want any more information about the differences between leasehold and freehold, or if you want to enquire about buying a new home in Slaithwaite, please contact Becki on 01484 844311 or becki@sbhomes.co.uk.


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Leasehold vs freehold - what's the difference? | SB Homes

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