Buying your first home comes with a lot of new terminology, and one of the biggest questions you will face early on is whether the property is freehold or leasehold. The difference affects what you own, what you pay for, and how much freedom you have in your new home — so it is worth getting clear on it from the start.

If a property is freehold, you own the building and the land it sits on outright. Most houses in England fall into this category.

Freehold is straightforward because:

  • You generally have broad freedom to decorate, renovate, and use your home (within planning rules) and subject to any restrictive covenants (legal promises) that may affect your property.
  • You are generally responsible for all maintenance — inside, outside, roof, garden, everything.
  • You arrange your own buildings and contents insurance.
  • You can, subject to any restrictions within the title, sell whenever you like without needing permission or paying admin fees.

Modern estates tend to have estate charges that freeholders pay to maintain shared spaces, such as private roads or landscaped areas. But overall, freehold is the most independent form of ownership.

Leasehold is more common with flats, although some houses are leasehold too. With leasehold, you do not own the land — you own the right to live in the property for a set number of years, as defined in the Lease.

Key things first-time buyers should know:

  • The lease length matters. As the years run down, the property can lose value and become harder to mortgage. Extending a lease can be expensive, especially once it drops below 80 years.
  • You will pay service charges for the upkeep of shared areas, the building structure, and buildings insurance. This can vary from year to year.
  • You may also pay ground rent, depending on the lease terms.
  • You are responsible for internal repairs, utilities, council tax and contents insurance.

Leasehold homes come with rules. These can include:

  • No pets without permission
  • No wooden flooring
  • No satellite dishes
  • No subletting
  • No hanging washing on balconies

If you want to make changes to the property, you may need the landlord’s written consent and may have to pay admin fees or surveyor costs.

When you eventually sell, you may need the landlord’s consent, and you’ll usually have to pay for management information for your buyer. Certain leases also include exit fees, calculated as a percentage of the sale price.

If you’re thinking of buying your first home, why not take advantage of our current offer for National Conveyancing Month.

During March our Residential Conveyancing team is offering 10% off your legal fees. Simply call 0800 088 6004 and quote “National Conveyancing Month”. Terms and Conditions apply see wilsonbrowne.co.uk/terms for details.