What is freehold?
In the UK, properties can be either leasehold or freehold. Leasehold means you have the right to live on the land for so many years, but you don’t actually own it. Freehold means you own the land itself – which has its perks, but also comes with extra responsibilities.
When you buy a freehold property, it means you’re totally in charge of the building, what happens to it and how it’s used (unlike leaseholders, who need permission from the freeholder to do certain things).
It’s also up to you to sort out any repairs or maintenance (though leaseholders have to pay towards that too).
Freeholds are usually houses. The good bit is that you’re the boss, and you don’t have to pay any ground rents, service charges or admin fees. You don’t need permission to do things like smoke, have pets, or have building work done (aside from planning permission, obviously) – unless there are other freeholders who also have a say.
Freeholds are often more expensive than leaseholds, because you own the land as well as the property. And again, being a freeholder comes with extra responsibilities. If there are other freeholders, agreeing on major decisions can be stressful and time-consuming. And If you like the idea of living somewhere with shared areas or services, like an apartment complex with a gym or a concierge, freehold probably isn’t for you.
Share of freehold or commonhold
With some flats, you get a ‘share of freehold’ along with your lease. That means there’s no ground rent or service charges to pay, and no worries about your lease running out. You’ll have more say in the upkeep of the building and land. But you might find yourself at loggerheads with the other leaseholders when it comes to arranging repair work and paying for it.
Commonhold is like a share of freehold, but usually means that the other leaseholders in the building are also freeholders. Together, you hold the freehold for the building and can decide together about whether to run up maintenance costs, and how you’ll share them.
Flying freehold and creeping freehold
Flying and creeping freeholds apply to parts of the property that are owned by one person, but overlap with another. For example, a balcony that juts out over another property (flying), or a cellar that sits underneath it (creeping). Needless to say, this kind of setup can create problems. Even if there’s a clear freeholder, whatever they do to that part of the property will affect others.
Things to think about
Buying a freehold property often seems easier, as you know exactly what you’re getting. You know you won’t have to worry about renewing your lease. And you don’t need to get permission to do things like smoke, have pets or do renovations (apart from planning permission, obviously).
If you’re buying a share of the freehold, ask what repairs have been done recently, what the relationship is like with the other freeholders (if there are any). And how they go about making decisions about the property.
Whether you’re buying leasehold or freehold, make sure you look into the property thoroughly and know about any fees that might come with it. Get an experienced chartered surveyor to check the property for issues that could crop up with the building or surrounding land.
In a nutshell
If you’re buying a property in the UK, it could be leasehold or freehold (or both). Leasehold means you have the right to live on the land for so many years. Freehold means you own the land (or a share of it) yourself. Being a freeholder gives you more freedom, and means you don’t have to worry about your lease running out. But it also comes with extra responsibilities – like looking after repairs.