What is the difference between freehold and leasehold?

They are two fundamentally different things to own, and the distinction has more practical consequence than almost any other feature of a UK property.

Freehold means you own the building and the land it stands on, outright and indefinitely. There is no landlord, no ground rent, no lease running down, and nobody's permission needed to alter your own property beyond planning and building regulations. Most houses in England and Wales are freehold.

Leasehold means you own the right to occupy for a fixed term — commonly 99, 125 or 999 years from when the lease was granted. The freeholder owns the building and land. You are, in legal substance, a long-term tenant who paid the rent up front. Most flats are leasehold, because someone has to be responsible for the shared structure, roof and common parts.

What leasehold brings with it:

A term that shortens. A lease is a wasting asset. Below roughly 80 years, extending becomes markedly more expensive because of an additional payment called marriage value, and many lenders become reluctant to lend at all. Always ask the remaining term, not the original.

Service charges for maintenance of shared parts, which can be substantial and can rise.

Ground rent, historically nominal but in some 2000s-era leases escalating aggressively — a scandal that prompted reform.

Permission requirements. Many leases require freeholder consent, often with a fee, for alterations, subletting or pets.

Commonhold exists as an alternative but remains rare. Share of freehold — where flat owners jointly own the freehold company — removes the adversarial landlord relationship while a lease still governs the flats.

Leasehold reform is ongoing and rules are changing; check current law and the specific lease before committing.