What is Freehold Property?

Most homes in the UK are owned on a freehold basis. This means that the owner of the home owns both the property and the land it stands on for an indeterminate period of time. This also means that the freeholder is accountable for all repairs and maintenance on the property. A freehold property becomes part of your estate and can therefore be passed down to your heirs upon your death.

If you own a freehold property you can make any changes you wish to the building and the land incorporated in the property, subject to local planning regulations. There may also be other restrictions in place in your area which will prevent you from making specific changes. For example, if your property was listed in a Conservation Area you may be quite limited with what you can change about your garden.

Further, there are usually restrictions on making changes to the structure of new builds – you will need to seek permission from the original developer of the property. These restrictions will be explained in a document known as a Restrictive Covenant. If you would still like to go forward with changes to your property then your conveyancing solicitor can help you work through this document and advise you on the best course of action.


Are Freehold Properties Worth More than Leasehold Properties?

Freehold properties or flats with a share of the freehold tend to be a much more desirable investment than leasehold properties and they incorporate much more value. The only potential disadvantage of buying freehold is that all repairs and maintenance are up to you to organise – and yet, it’s completely up to you whether you want to carry them out or not.

Buying the Freehold on your Home

Owning a property on a leasehold basis costs more money in the long run and leaves you with no physical worth to add to your estate. This is why leasehold owners often consider purchasing the freehold of their property.

The freehold can be obtained by buying a share known as a ‘collective enfranchisement’. This involves all leaseholders in the block to act together to own their property outright. A Section 13 Notice is passed to the freeholder and will require that more than 50% of owners agree to participate in the acquisition of the freehold. Once the freehold has been procured, the lease can be extended for up to 999 years.

Problems with Buying the Freehold

There are often barriers that prevent leaseholders from obtaining collective enfranchisement. Besides the cost of purchasing the freehold (which is usually relatively high), there is the need to set up a new company with directors who are willing to contribute the work and effort required to manage the affairs.

If only half of the leaseholders in the block want to participate in purchasing the freehold then the cost to each leaseholder will effectively be double what it would be if 100% of owners participated.

The Advantages of Owning the Freehold

There are many, clear advantages of owning the freehold of your property in comparison to participating in a leasehold arrangement:

  • The lease you own on your property is determinate. Once the term comes to an end the property is passed back to the freeholder and in turn, the property becomes less valuable as more of the term expires. This isn’t a problem when owning a freehold property.
  • Freehold properties are not subject to any changes or charges that the landlord can apply to leasehold properties. These changes are often difficult to challenge meaning you have less control when you own leasehold.
  • If you own a freehold property then you are not subject to changes from a landlord – you have complete control and responsibility over the property.