Freehold ownership is where property is owned outright with no long lease. Most houses are owned freehold, although in some areas there may be covenants that require owners to do certain things.

Leasehold properties are usually flats, although some leasehold houses still exist. Leasehold flats can be in purpose built blocks of flats, converted properties, over commercial or retail buildings. The flats are likely to have various areas used in common by the other leaseholders and freeholder.

A lease is a detailed legal document that identifies the rights and responsibilities of the leaseholder and freeholder. The lease is effectively a long tenancy which gives the right to occupy and use the flat for a long period - the 'term' of the lease. It will also identify the part of the building that is owned by the leaseholder and those areas retained by the freeholder.

The original Lease will commonly run for at least 99 years, although 125 years and 999 years leases are also found. Ground Rent needs to be paid each year and this is set at various levels by the Lease at around £50 to £500 per year. Leases bought under the Right To Buy legislation from Local Authority landlords usually have a Ground Rent of £10 per year. Service charges will vary.

As time passes, the number of years left on the lease (unexpired) will reduce. Ultimately the lease will expire completely, but leases can be extended well before the end of the lease. Leaseholders have rights under legislation to extend the lease and to ask for a new lease. Lease extensions can preserve the value of the lease.

Share of Freehold
Clarke Wilson can give impartial and professional advice to both freeholders and leaseholders on this complex area. Please contact [1] the office for more information.