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An introduction to leasehold

Overview

In this guide

How leasehold works

Leasehold is essentially a form of long-term tenancy. You buy the right to live in and use a property for a fixed number of years, set out in a legal agreement called a lease.

Leases typically last 99, 125 or 999 years, though some are shorter. During this time, you can live in the property or sell it subject to the terms of the lease.

How long a lease lasts is known as the “term”. The term always counts down from the day the lease was first granted, not from when you bought it. This can explain why a lease of 125 years might only have 99 years left when you buy it.

As the lease shortens

Once the lease has 80 years or less remaining, it is known as a “short lease”. It is much more expensive to extend a short lease and harder to remortgage. This generally affects the resale value of the property too as buyers prefer a property with a long lease.

Most leaseholders prevent this by extending their lease or buying the freehold before the lease drops to 80 years. As part of the leasehold reforms, the government plans to make it cheaper and easier to extend a lease (especially short leases).

When the lease expires

When your lease expires, legal ownership of the property usually goes back to the freeholder. Most leaseholders prevent this by extending their lease or buying the freehold before the lease expires.

Check the length and years left on a lease

Leasehold vs freehold

Table comparing freehold and leasehold
Leasehold Freehold
You own your home for a fixed period (usually 99, 125, or 999 years) with the potential to extend this period (known as a lease extension). You own your home indefinitely – there is no time limit.
The terms of your lease control what you can and cannot do to your home – for example, if you can make alterations or rent it out. There is no lease limiting what you can do.
You pay the costs detailed in the lease – for example, service charges, administration charges and sometimes ground rent. Usually, you do not pay any charges or ground rent.
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Find out more: what are service charges, administration charges and ground rent

Commonhold: an alternative to leasehold

Commonhold is currently a very rare type of ownership. It allows you to own the freehold of an individual flat, house or non-residential unit in a building or on an estate. And unlike leasehold, there is no limit on how long you own the property for.

Find out more: the commonhold system

Table comparing leasehold and commonhold
Leasehold flats Commonhold
You own your home for a fixed period (usually 99, 125, or 999 years) with the potential to extend this period (known as a lease extension). You own your home indefinitely. There is no time limit.
The landlord (freeholder) normally owns the building’s structure, shared areas and the land it stands on. There is no landlord (freeholder). Flat owners own and manage their building together through a commonhold association which has full control over the building management and costs.
You pay the costs detailed in the lease – for example, service charges, administration charges and sometimes ground rent. There is no ground rent. You pay service charges for the maintenance and running of shared services and common areas.
Last updated:
22 December 2025
Next review:
22 December 2027