Approaches To Owning Property

There are two primary methods of owning a house in England and Wales: Freehold and Leasehold ownership.


When you own a freehold property, you own the whole structure and the ground on which it sits, giving you ownership for an indefinite amount of time. Maintenance of the structures and land will fall to you.

Most houses are freehold, although not all of them, and some may be leased, as detailed in the section below. There is a preference for freehold holding since it is a simpler arrangement for most people. Furthermore, freehold affords the owner a greater sense of sovereignty over their property as well as the opportunity to secure a discounted price when purchasing off plan like the development at Broad Oaks, Downham Market.


A Leasehold is when you are given the right to use a property or portion of a property for a considerable length of time. For a specified amount of time (usually 99 years or more), the freeholder has the right to take back the property if you do not extend the lease.

Leasehold ownership is a transitory right to use the property and land, and this is what distinguishes it from freehold ownership, which has a permanent right to use the property.

Although there are also leasehold homes, the leasehold structure is most used for flats and blocks in England and Wales.

According to the lease, which governs the contractual relations, both the freeholder (also known as the Landlord or Lessor) and the leaseholder (sometimes called the Tenant or Lessee) are responsible for certain things. In addition, you’ll have to pay a yearly ground rent, a fee stated in the lease, which is generally between £50 and £300, but your lawyer will need to examine the specifics of your lease.

On top of this, you’ll likely have to pay an annual fee to cover maintenance costs for shared areas and a portion of the cost for insurance and management of the building.

A leaseholder property is really a lease purchased from the seller and taken over for the remainder of the lease term. As a rule, a mortgage lender only likes to lend you the money if the lease has a large remaining term. It’s common for them to ask for at least a further seventy years on the lease.

Charges For Services

Owners of leasehold properties are responsible for their portion of the building’s costs, which often include the following:

  • The insurance for the buildings.
  • Public spaces’ electricity, heating, and air-conditioning.
  • Communal cleaning.
  • Repairs to the fabric of the building, which include any structure, surface, fixture, or fitting associated internally or externally with a building.
  • The expense of hiring someone to manage the property.

Reserve and Sinking Funds

Maintenance and upgrading of a property are unavoidable as time passes. Examples include periodic exterior decorating of a structure or roof replacement. Unforeseen expenses or overspending must also be controlled when they occur.

Reserve funds are typically small sums of money raised and maintained by the freehold management to cover unforeseen expenses or overspends. There is no need for a huge sum of money if the property is well-managed.

Sinking funds and reserve funds are terms that are sometimes used interchangeably. A sinking fund is meant to accumulate cash over time for, usually high-value repairs or replacements, such as painting and roofing.

There will be a clause in the lease that specifies what charges can be made, and the amount will be added to the annual service fee.

Freehold sharing

If a group of leaseholders decides to acquire the freehold for themselves, they will each own a part of the freehold. Although they individually get their own lease, they will together be the freeholders of the entire building. This model has the advantage of giving leaseholders more influence, especially when it comes to shared operating expenditures or lease extensions.


Despite being introduced in 2002, this new form of ownership hasn’t taken off the way many anticipated it would. Rather than a traditional leaseholder and a freeholder, the flat owners owned everything together. The idea is to go beyond the sharing of freehold arrangements. Since there is no lease in the picture, the individual flat owners own their flat on a permanent basis and thus not on a lease term basis. Despite the introduction of this new way to own property, freehold/leasehold remains the most common form of ownership in most properties.