Freehold
Quick answer
Outright ownership of a property and the land it stands on, with no time limit and no landlord above you. Most houses are freehold; most flats are leasehold. A freeholder of a block owns the building and collects ground rent and service charges from the leaseholders.
At a glance
- You own
- The property and land outright
- No
- Ground rent, lease term or service charge to a superior
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Open full guideWhy Freehold matters for landlords
A freehold house avoids the lease restrictions, ground rent and service charges that complicate letting a leasehold flat, which is why many landlords prefer freehold stock. Where a landlord owns a converted house as several flats, they may hold the freehold and grant leases — becoming the freeholder with the repairing and service-charge obligations that role carries. Understanding whether you are buying freehold or leasehold, and what obligations attach, is fundamental to pricing the deal.
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Official sources
LetCompliance editorial reviews this entry every quarter against the sources above. Always confirm specific duties with a qualified solicitor or your local council.
Related terms
Leasehold
Owning the right to occupy a property for a fixed number of years under a lease, while a separate freeholder owns the land and building. Most flats in England are leasehold. Leaseholders usually pay ground rent and service charges and must observe lease conditions, including any restrictions on subletting.
Service Charge
The amount a leaseholder pays towards the cost of maintaining, insuring and running the shared parts of a building — cleaning, lifts, buildings insurance, communal repairs and a reserve (sinking) fund. It is charged by the freeholder or managing agent and must, by law, be reasonable and properly consulted on for major works.
Buildings Insurance
Cover for the physical structure of a property — walls, roof, floors and permanent fixtures — against risks such as fire, flood, storm and subsidence. For a leasehold flat the freeholder usually arranges block buildings insurance and recovers the cost through the service charge; for a house, the landlord arranges it directly.
Ground Rent
A payment due from a leaseholder to the freeholder. Ground rents on long leases granted on or after 30 June 2022 are capped at a peppercorn (effectively zero) under the Leasehold Reform (Ground Rent) Act 2022.
Capital Growth
The increase in a property’s market value over time, as distinct from the rental income it produces. It is only realised (and taxed, via Capital Gains Tax) when the property is sold. Many landlords weigh capital growth against rental yield when choosing where and what to buy.
Fair Wear and Tear
The reasonable deterioration of a property and its contents from normal day-to-day use over the length of the tenancy. A landlord cannot make deposit deductions for fair wear and tear — only for damage, cleaning or loss beyond it. What counts as fair depends on how long the tenant lived there and how many people occupied the property.