What you’ll learn
By the end of this step, you should be able to:
- Turn life needs and budget limits into practical property criteria.
- Explain the main ownership and cost differences between freehold and leasehold.
The decision this lesson prepares you for: What property criteria matter to you, and do you understand what freehold or leasehold would mean for this specific home?
Before viewing anything, define the home on paper — and understand the one legal distinction that changes everything about owning it. Whether a property is freehold or leasehold determines what you own, what you pay every year, and what can go wrong. In England, most houses are freehold and most flats are leasehold, and the difference deserves more attention than the kitchen.
Freehold, leasehold, share of freehold
Freehold means you own the building and the land, indefinitely. Leasehold means you own the right to occupy for the years left on a lease, while a freeholder owns the building — bringing ground rent (often now nominal), a service charge for shared maintenance, and rules about what you can alter. Share of freehold means the flat owners jointly own the freeholder company — usually the healthiest version of flat ownership, though the lease itself still matters.
The numbers that make or break a leasehold
Ask three questions of any leasehold candidate before viewing: How many years remain on the lease? (Below roughly 85–90, extending becomes an approaching cost. Below 80 years extensions have historically cost sharply more through a 'marriage value' premium — reform abolishing that premium has been passed and upheld in court but was not yet in force in July 2026, so check the current position — and lenders hesitate over short leases regardless. One reform already in force: you no longer need to have owned for two years before claiming a statutory extension.) What is the service charge now and over the last three years? Is there a sinking fund for major works, or do big bills land as one-off demands? Vague answers to any of these are themselves information.
Define the property, not the dream
Turn Phase 1's needs and wants into a concrete spec: bedrooms, outdoor space, parking, work-from-home space, condition you can take on, period versus new build. Note which items are structural (you cannot add a garden) versus cosmetic (you can change a bathroom). Structural needs filter listings; cosmetic wants are negotiating currency.
| Item | Need / Want / Dealbreaker | Notes |
|---|---|---|
| Bedrooms and layout | ||
| Outdoor space | ||
| Parking / transport | ||
| Tenure I will accept (freehold, share of freehold, leasehold with 90+ years) | ||
| Condition and works I can take on | ||
| Monthly ceiling incl. service charge and council tax |
Your action list
Official sources
Practical tips
- Ask agents for the lease length and service charge in the first phone call — it filters half of unsuitable flats without a viewing.
- A slightly dated freehold house and a shiny leasehold flat at the same price are very different financial objects.
What can go wrong
- Escalating ground rent clauses (doubling every 10–15 years) can make a flat hard to sell or mortgage — read the numbers, not the reassurance.
- A short lease is not a bargain unless you have priced the extension: it can cost tens of thousands and take months.
- PropertySquares provides education, not financial or legal advice. Verify current rules and obtain advice for your circumstances before acting.
Practise the decision
A leasehold flat looks perfect on paper. What should you check before viewing?
You have shortlisted a leasehold flat that fits your budget and location. The listing does not mention the remaining lease length, service charge or ground rent.
Check your understanding
Choose an answer to get immediate feedback. This does not affect your saved progress.