If you are looking to buy a flat or apartment in London, there is a good chance you will come across the term leasehold property. But what does leasehold actually mean, how does it differ from freehold, and what should you check before buying.
In simple terms, buying a leasehold property means you acquire the right to own and occupy the property for the remaining period set out in a legal agreement known as a lease. The building and the land on which it stands will usually be owned by a separate freeholder, although some apartment owners may also own a share of the freehold.
Leasehold ownership remains extremely common for flats and apartments in London. Understanding the lease, its remaining term, service charges and other financial obligations is therefore an important part of buying property in the capital.
When you purchase a leasehold property, you acquire the lease for the remaining length of its term.
Residential leases are often originally granted for long periods such as 99, 125, 250 or even 999 years. For a buyer, however, the most important question is how many years remain on the lease when you buy the property.
For example, if an apartment was originally granted a 125-year lease 20 years ago, approximately 105 years would remain.
A leaseholder will also normally have obligations relating to the property and wider building. These can include service charges, maintenance contributions and restrictions governing how the property can be used or altered.
Yes. Leasehold ownership is particularly common for London apartments.
Separate leases allow individual flats within the same building to be owned by different people while establishing responsibilities for shared areas and services such as the roof, structure, entrance hall, lifts, gardens, security and communal spaces.
A London property being leasehold should therefore not automatically discourage you from considering it. What matters is the quality and terms of the particular lease attached to the property.
Always establish the remaining lease term before buying a leasehold property.
Lease length can affect a property's value, mortgageability and future saleability. A shorter lease may also mean that a lease extension needs to be considered.
Leasehold legislation has undergone substantial reform in recent years. The Leasehold and Freehold Reform Act 2024 contains changes affecting areas including lease extensions and enfranchisement, but not every provision of the Act is necessarily in force at the same time.
Your solicitor or conveyancer should therefore advise you on the law actually in force when you purchase the property and how it applies to the specific lease you are considering.
Leaseholders commonly pay a service charge towards the cost of maintaining and managing their building.
Depending on the property, this may contribute towards:
Service charges can vary considerably between London developments.
This is especially important when considering new-build and luxury London properties. A development offering a 24-hour concierge, gym, swimming pool, spa, residents' lounge and other amenities is likely to have higher running costs than a smaller development with fewer facilities.
Rather than looking only at the annual service charge, buyers should understand what it covers, how it has changed over time, whether future increases are expected and whether the building has suitable reserve funds.
Ground rent is different from a service charge.
Under the Leasehold Reform (Ground Rent) Act 2022, ground rent on most qualifying new long residential leases granted from 30 June 2022 is restricted to a peppercorn, which effectively has no financial value.
However, older leases can still contain ground-rent obligations. If you are purchasing an existing London apartment, your solicitor should check the amount payable, whether it increases over time and whether the relevant clause could affect mortgageability or resale.
Buyers should also investigate whether major works are expected at the building.
These could include:
Depending on the lease and the circumstances, leaseholders may be required to contribute towards qualifying expenditure.
Before exchange, your solicitor should investigate planned works, recent expenditure, service-charge accounts and any reserve or sinking fund held for future repairs.
A lease can place restrictions or conditions on how you use or alter the property.
Common areas covered by a lease may include:
This is particularly important if you are buying a London property that you intend to renovate or let to tenants.
Your solicitor should establish whether the lease permits your intended use and whether any alterations require the freeholder's consent or a licence to alter.
You may also see London properties advertised as having a share of freehold.
Broadly speaking, this usually means that you own the leasehold interest in your individual apartment while also owning an interest in the freehold of the building, often together with other flat owners.
This can give residents greater involvement in decisions concerning the building and its management.
However, owning a share of freehold does not mean that the lease becomes irrelevant. The flat will generally still be governed by a lease setting out rights, obligations and responsibilities.
Not necessarily.
Freehold ownership is common for houses, while leasehold remains a standard ownership structure for apartments across London.
A high-quality apartment with a long lease, well-managed building, appropriate reserves and sensible service charges could be a better purchase than another property simply because the latter has a different ownership structure.
Instead of asking only "Is this property leasehold?", a more useful question is:
"Is this particular leasehold property a good purchase?"
That means looking at the lease term, service charges, ground rent, management of the building, planned expenditure, restrictions and the overall quality and value of the property together.
The Renters' Rights Act 2025 introduced major reforms to England's private rented sector, with key tenancy reforms applying from 1 May 2026. However, it is important to distinguish between being a residential tenant and owning a long leasehold property. The Renters' Rights Act primarily regulates the relationship between private landlords and their tenants. It does not replace the separate legal framework governing long leasehold ownership. It becomes particularly relevant if you are buying a London property to let. In that situation, buyers should consider both the terms of the lease, including whether subletting is permitted, and the landlord obligations applying under current private-rented-sector legislation.
International buyers can initially find the UK leasehold system unfamiliar, particularly if they are purchasing London property from overseas. Leasehold itself should not automatically discourage an overseas buyer from purchasing an apartment in London. The important thing is understanding exactly what you are buying and the obligations attached to the property.
Before exchange, your professional advisers should establish:
Buying a Leasehold or New-Build Property in London
Buying property in London involves considerably more than choosing the right postcode and agreeing a purchase price.
Lease length, service charges, building management, amenities, planned works and restrictions can all affect whether an apartment is the right property for you.
This is particularly important with new-build apartments in London, where buyers should understand the development, building specification, service charges, lease structure and long-term running costs before proceeding.
Looking to Buy, Sell or Let a New-Build Property in London?
We specialise in selling, buying and letting new-build properties across London.
Whether you are searching for a new-build apartment, looking to sell your London property or need expert support letting an investment, our team can guide you through the London new-build market from start to finish.
For buyers, we can help identify suitable developments and properties, assess opportunities and support you throughout the acquisition process. For sellers and landlords, we provide specialist marketing and letting expertise designed for London's new-build market.
View our properties for sale in London
Contact us today to discuss buying, selling or letting a new-build property in London.
This article is provided for general information only and reflects the legal position at the time of publication. Leasehold, property and private-rental legislation is subject to change, and not all provisions of recently enacted legislation may be in force. This article does not constitute legal, tax or financial advice. Buyers, sellers and landlords should obtain advice from appropriately qualified professional advisers regarding their individual circumstances.
Please leave your message here, and a member of our team will get back to you within 24 hours. Alternatively, you can reach us at info@chbl.uk or call us at 0203 949 8888.
International House, 1 St. Katharine's Way
London, E1W 1UN
