Buying a property is one of the biggest financial decisions you'll make, and understanding the difference between leasehold and freehold ownership is crucial. With recent leasehold reforms and shifting market conditions, here’s what buyers need to know before making a purchase in 2025.
What’s the difference?
Freehold: When you buy a freehold property, you own both the property and the land it stands on indefinitely. There are no lease agreements or ground rents to pay, giving you full control over your home.
Leasehold: A leasehold property means you own the property for a set number of years but not the land. You may have to pay ground rent, service charges, and obtain permission from the freeholder for major changes.
Why it matters in 2025
Recent government reforms have aimed to make leasehold ownership fairer, particularly by limiting excessive ground rents and making it easier for leaseholders to extend their leases or buy the freehold. However, understanding the long-term implications of leasehold ownership remains essential when buying a property.
Key considerations for buyers
- Lease length: Properties with shorter leases (typically under 80 years) can be harder to sell and may require costly extensions.
- Ongoing costs: Service charges, maintenance fees, and potential ground rent increases can impact affordability.
- Resale & mortgageability: Some lenders may be hesitant to offer mortgages on short leases, affecting future resale value.
- New-build developments: Many new apartments are leasehold, so buyers should carefully check the terms before committing.
Making an informed choice
Whether you’re looking for a freehold house or considering a leasehold apartment, it’s important to understand the long-term financial and legal implications. If you're unsure which option is right for you, speaking to an expert can help you make a confident decision.
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If you’re buying in 2025, our team is here to guide you through the process. Get in touch today for expert advice on finding the right property for your needs.
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