UK property ownership types
Homes in England and Wales are held as freehold, leasehold or commonhold. Most flats are leasehold, which means the property is held for a fixed number of years and returns to the landowner when the lease ends; freehold carries no time limit.
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| Form | Duration | Recurring payment | Where it is common |
|---|---|---|---|
| Freehold | No end date | None | Houses |
| Leasehold | The years set in the lease | Ground rent and service charge | Flats |
| Commonhold | No end date | Share of communal costs | Rare |
| Share of freehold | Permanent share plus a lease | Service charge | Small blocks of flats |
The conveyancing process describes how title passes from one party to another; what actually passes depends on the ownership type, and in England that type also determines the recurring charges the owner takes on. For the financing side, see UK home financing.
01
How many types of property ownership exist in the UK?
England and Wales recognise three: freehold, leasehold and commonhold. Freehold gives the owner the building and the land with no end date; leasehold grants use for a set number of years; commonhold is permanent shared ownership designed for flats.
Commonhold entered the statute book in 2002 and never took hold. The government intends to make commonhold the default form for flats, which depends on the draft Commonhold and Leasehold Reform Bill becoming law; it is not the position today.
02
What does leasehold mean?
Leasehold is the right to occupy a property for the number of years set out in the lease; when that term expires, ownership returns to the freeholder. Most flats in England and Wales are leasehold, and shared-ownership houses are leasehold too.
A leasehold buyer purchases the right to use the property rather than the property itself. The years left on the lease drive the value of that right directly: as the remaining term shortens, the market value falls and the cost of extending rises.
03
What regular costs come with a leasehold?
A leaseholder pays two recurring charges: ground rent to the landowner and a service charge covering the building's communal costs. The service charge is set each year against maintenance and insurance spending, so it is not a fixed figure.
- Ground rent is an annual sum paid to the landowner, and the lease can carry an escalation clause.
- The service charge covers the roof, lifts, communal cleaning and building insurance.
- Major works are billed separately as a one-off contribution.
- Administration fees apply to lease variations and consents.
- Since December 2025, leases longer than 21 years no longer count as assured tenancies.
Service charge levels are visible before purchase. Asking for three years of accounts shows what the building actually costs to run, and the gap between the figure quoted in an advertisement and the amount actually charged is read from those documents.
04
How is a lease extended?
A leaseholder has a statutory right to extend: 90 years for a flat and 50 years for a house. Since January 2025 the requirement to have owned the property for two years no longer applies, so a claim starts from day one.
Leaseholders also hold the right to buy the building's freehold. Since March 2025 the Right to Manage has been available in mixed-use buildings where up to 50 per cent of the floor space is non-residential, and in most claims the landlord's legal costs are no longer charged to the leaseholders.
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05
Did leasehold rules change in 2026?
Leasehold reform is half finished. The two-year ownership requirement went in January 2025, Right to Manage widened in March 2025 and long leases stopped counting as assured tenancies in December 2025; ground rent caps and commonhold remain a draft bill.
| Change | Status | Date |
|---|---|---|
| Two-year ownership requirement removed | In force | January 2025 |
| Right to Manage extended to mixed-use buildings | In force | March 2025 |
| Leases over 21 years no longer assured tenancies | In force | December 2025 |
| 990-year extensions and abolition of marriage value | Not in force | No date set |
| Ground rent capped at £250 a year | Proposal | Draft bill |
| Commonhold as the default form for flats | Proposal | Draft bill |
That distinction decides what a purchase costs. Someone buying a leasehold flat today pays an extension premium calculated under the rules in force, not under the rules awaiting commencement, and the government has not announced a date for the change.
06
What documents are checked when buying a leasehold flat?
Four documents are checked: the years remaining on the lease, the ground rent and any escalation clause, three years of service charge accounts, and the building's fire safety record. A regulated conveyancing solicitor carries out that review.
- Years remaining on the lease; below 80, the extension premium is calculated.
- Ground rent and the escalation clause in the lease.
- Three years of service charge accounts and any planned major works.
- The building's fire safety position and the cost of any remediation.
- Who holds the freehold and who manages the building.
07
What does British Global do on ownership type?
British Global provides information and referral: it explains the difference between freehold and leasehold, prepares a preliminary report on area and budget, and refers you to a regulated solicitor where a legal review is needed. It does not review title.
- A preliminary report is prepared against area and budget.
- The differences between ownership forms and the costs they carry are set out.
- Document review is referred to a solicitor authorised by the SRA.
- Referrals are made for the tax obligations that follow a purchase.
Sources
- GOV.UK — Under a leasehold, ownership returns to the freeholder when the lease ends; most flats are leasehold and houses bought through shared ownership are leasehold too.
- GOV.UK — The statutory extension is 90 years for a flat and 50 years for a house, and the cost of extending rises significantly once 80 years or less remain.
- GOV.UK — The two-year ownership requirement was removed in January 2025, the Right to Manage was extended in March 2025 to buildings with up to 50 per cent non-residential space, and long leases ceased to be assured tenancies in December 2025; ground rent caps and commonhold as default are proposals in a draft bill.
- GOV.UK — The new valuation method, including 990-year extensions and the abolition of marriage value, is not yet in force and requires secondary legislation and a further bill; no date has been announced.
