Leasehold Properties: What You Need To Know

Leasehold ownership is common for flats and some houses in the UK. When buying or selling a leasehold property, there are extra considerations compared to freehold.

What Is Leasehold?

You own the property for a fixed period (e.g. 99, 125, or 999 years), but not the land it sits on. The freeholder (landlord) retains ownership of the land and communal areas.

Key Leasehold Costs

• Ground Rent: A yearly fee paid to the freeholder. If over £250 (£1,000 in London), the lease may be classed as an Assured Shorthold Tenancy (AST), which carries forfeiture risks if rent is unpaid for 3+ months.
• Service Charges: Contributions for building maintenance, insurance, and communal services. These can vary and may include reserve funds for major works.
• Administration Fees: Charges for permissions (e.g. subletting, alterations) or leasehold management packs.

Lease Length Matters

• Leases under 80 years can affect property value and mortgage eligibility.
• Extending a lease can be costly and may require a premium, especially if ground rent is high.

Repairs and Notices

• Major works may trigger a Section 20 Notice, requiring leaseholders to contribute. Always ask about planned works and reserve funds.

Legal and Risk Considerations

• Review lease terms carefully—restrictions may include pets, alterations, or subletting.
• Ensure your solicitor checks for compliance with lender requirements and statutory protections.

Selling a Leasehold Property

• Provide a management pack early to avoid delays.
• Be aware of recent reforms (2025) that simplify lease extensions and enhance rights to manage the building collectively.

If you are buying or selling a leasehold property, our friendly experts are here to guide you through every step.