When you buy a property, you do not always own the land it sits on. That depends on whether the property is freehold or leasehold, and it can affect both your ongoing costs and the level of control you have.
Buying the freehold can be straightforward in some cases, and complex in others. The right approach depends on the property type, the remaining lease length, and whether you are buying alone or as part of a group.
What is a freehold?
A freehold means you own:
- The property
- The land it sits on
- The ownership indefinitely, until you sell
Freehold owners are responsible for maintaining the building and land. Most houses are freehold, although some new-build houses have historically been sold as leasehold.
A true freehold typically means you are not paying a landlord ground rent, and you are not subject to a lease that runs down over time.
What is a leasehold?
A leasehold means you own the right to live in the property for a fixed number of years. The building and land are owned by a freeholder (often referred to as the landlord).
Lease lengths vary widely. Some are long, some are short, and the remaining term matters because it can affect:
- Mortgage availability
- Resale value
- The cost of extending the lease or buying the freehold
Flats are most commonly sold as leasehold, because the building and communal areas need a legal framework for management and repair responsibilities.
Is it worth buying the freehold?
It depends on the property type.
If you own a house
Buying the freehold is often worth exploring if you do not already own it. In many cases it can remove ground rent and reduce the long-term complexity of ownership.
That said, whether it is “worth it” comes down to price, legal costs, and whether the existing lease creates any genuine issues for you in the near term.
If you own a flat
Buying the freehold is a different proposition.
You usually cannot buy the freehold of your flat alone. Flats typically require collective purchase with other leaseholders in the building, because the freehold relates to the entire building and land.
Even if you do buy a share of the freehold, you will still contribute to maintenance and insurance costs. The change is that the flat owners have more control over how decisions are made and what is paid.
Who can buy the freehold?
Eligibility depends on the property and the lease structure.
Broadly, for a flat building, eligibility is typically shaped by:
- The lease being a long lease
- The building meeting minimum requirements around the number of flats
- A sufficient proportion of flats being held on long leases
- The building not being excluded due to specific ownership types or charitable status
In practice, the detail matters, and this is where a solicitor experienced in enfranchisement is important.
What affects the cost of buying the freehold?
The cost is not a single fixed figure. It is driven by a valuation that reflects the freeholder’s interest in the building, and it varies based on:
- The property value
- The ground rent terms
- The number of years left on the lease
- The structure of the building and number of flats
- Whether marriage value applies
Marriage value and the 80-year point
Lease length is often the biggest lever in cost.
Once a lease drops below a certain point, the cost of extending the lease or buying the freehold can increase sharply. This is why the “80 years remaining” mark is often treated as a practical tipping point.
If you are approaching that zone, it is usually better to understand your options early, rather than waiting until the lease becomes short.
Other costs to budget for
Even if the freehold price looks manageable, the transaction comes with other costs. These may include:
- Your legal fees
- Valuation fees
- The freeholder’s reasonable legal and valuation costs (in many cases)
- Land Registry and admin costs
- Stamp Duty, depending on structure and price
The total cost is therefore not just the premium paid for the freehold.
Can you fund the freehold purchase?
Some homeowners fund the cost by remortgaging and raising additional borrowing, especially where buying the freehold improves the property’s long-term value or mortgageability.
Whether this is suitable depends on affordability, your current mortgage product, and whether early repayment charges apply.
A sensible checklist before you start
Before you commit time and money, it helps to get clarity on:
- Is the property leasehold or freehold today
- How many years remain on the lease
- What ground rent and review clauses exist
- Whether the building is eligible for a collective purchase
- Rough valuation of the likely freehold premium and total costs
- Whether you would fund it from savings or borrowing
Summary
Buying the freehold can simplify ownership and improve control, but it is not a one-size-fits-all decision. Lease length, ground rent terms, property type, and the legal structure of the building all shape whether it is worthwhile.
If you are unsure, the most practical first step is to understand your current lease position and the remaining term. From there, you can explore the likely cost, process, and funding options in a way that is proportionate and realistic.
To enquire about remortgaging, feel free to contact us on 023 8235 2300 or use our online enquiry form to arrange a call back at a time that suits you.
