Summary: Understanding the difference between leasehold and freehold is essential for UK homebuyers. These terms can influence not only the costs of owning a property but also your level of control and your ability to secure a mortgage.

 

A leasehold property gives you ownership of the building for a fixed period, while the land belongs to a freeholder. Leaseholders often pay ground rent and service charges, and shorter leases can affect both resale value and mortgage options. By contrast, a freehold property means you own both the building and the land indefinitely. There are no lease-related charges, and you have greater freedom over alterations and maintenance. Freehold homes are usually more appealing to both buyers and lenders.

This blog explores the key differences between leasehold and freehold, outlines their impact on costs, control, and mortgages, and highlights why understanding these terms is crucial when buying a home in 2025.

Buying a home is one of the biggest financial decisions you’ll ever make. Along the way, many buyers encounter confusing terms like leasehold and freehold. In fact, “leasehold vs freehold” is one of the most searched-for property questions in the UK, with thousands of people looking for clear answers each month.

If you’re considering applying for a mortgage, understanding the difference between leasehold and freehold is essential. It could affect your monthly costs, long-term security, and even whether certain lenders will approve your mortgage application. That’s where the guidance of a broker from Just Mortgages can help.

What Is Leasehold?

A leasehold property means you own the building, but not the land it sits on. Instead, you lease it from a freeholder for a set number of years — often 99, 125 or even 999.

Key points about leasehold:

• You’ll usually pay ground rent and service charges for maintenance of communal areas.
• You may need permission from the freeholder to make changes, such as extensions or renovations.
• As the lease term shortens, the property may become harder to sell or remortgage unless you pay for a lease extension.

Many flats in the UK are leasehold, and buyers need to budget for these additional costs. A mortgage adviser can explain how this might affect your borrowing potential and options.

What Is Freehold?

A freehold property means you own both the building and the land it stands on outright. There’s no time limit on your ownership, and you won’t pay ground rent or service charges (unless you’re in a private estate with shared amenities).

Benefits of freehold:

• Full control over your property.
• No lease extension worries.
• Often seen as more attractive to mortgage lenders and buyers.

Most houses in England and Wales are freehold, though exceptions exist — especially in newer developments. A broker from Just Mortgages can help you quickly understand whether a freehold home is a better fit for your plans.

Leasehold vs Freehold: The Key Differences

Feature	Leasehold	Freehold
Ownership	Building only (for a fixed term)	Building + land (permanent)
Costs	Ground rent, service charges, lease extension fees	No ground rent or lease extension costs
Control	Limited (need permission for alterations)	Full control
Mortgage Impact	Can be harder to secure if lease is short	Generally straightforward
Resale Value	May decrease as lease shortens	Usually stable or increasing

Advisers can help break this down further for your individual circumstances, ensuring you fully understand how these differences impact your mortgage options.

Why It Matters for UK Homebuyers in 2025

With UK mortgage rates and property prices still fluctuating, it’s more important than ever to know exactly what you’re buying into. For first-time buyers especially, unexpected leasehold costs can stretch budgets and affect affordability.

Mortgage lenders are also paying close attention to lease terms. If a lease is under 70–80 years, you may find fewer mortgage products available, making it harder to secure a competitive deal. This is where professional advice from Just Mortgages can prove invaluable.

 

FAQs About Leasehold and Freehold

1. Can I get a mortgage on a leasehold property?
   Yes, but most lenders prefer leases with at least 80 years left. A broker can help identify lenders who are more flexible.
2. What happens when a leasehold expires?
   Ownership reverts to the freeholder. That’s why extending your lease before it runs down is important — something advisers can guide you through.
3. Is it worth buying a leasehold flat?
   It depends. Leasehold flats can be affordable entry points for first-time buyers, but you must factor in ongoing charges. An adviser can help you assess whether it fits your budget.
4. Can I convert a leasehold to freehold?
   Sometimes, yes. Many leaseholders have the legal right to purchase the freehold collectively, though this can be costly. Just Mortgages can connect you with the right advice.

 

How a Just Mortgages Broker Can Help

Understanding the difference between leasehold and freehold is crucial when planning your home purchase. But every buyer’s situation is unique.

A Just Mortgages broker can:

• Explain how leasehold or freehold affects your mortgage eligibility.
• Compare lenders to find products suited to your circumstances.
• Help you budget for service charges, ground rent, and other ongoing costs.
• Guide you through lease extension or freehold purchase options.

With nationwide coverage and access to thousands of mortgage deals, Just Mortgages offers clear, personalised support tailored to your needs.

Final Thoughts

Whether you’re buying your first flat or moving into a freehold home, knowing the leasehold vs freehold differences helps you make informed decisions. With expert guidance from Just Mortgages, you can avoid costly surprises and secure the right mortgage deal for your future.

 

Ready to explore your options? Click here to contact Just Mortgages today for tailored mortgage advice and support on your home buying journey.

 

YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Just Mortgages is a trading name of Just Mortgages Direct Ltd which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 09/09/2025.