Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Freehold definition

What does Freehold mean? Freehold describes outright ownership of land (and the buildings on it) for an unlimited duration, as distinct from leasehold. In practice, a freehold owner has the right to possess, use and dispose of the property, subject to third‑party rights (such as easements/servitudes), covenants, mortgages/standard securities and statutory controls. In England and Wales and Northern Ireland, freehold generally refers to the legal estate of fee simple absolute in possession, one of the two estates capable of existing at law (see Law of Property Act 1925; similar provisions apply in Northern Ireland). In Ireland, it typically denotes a fee simple estate under...

Commonhold v leasehold for flats in England and Wales: comparison, conversion, lender issues and proposed reforms (2025–2026)

Published by a LexisNexis Property expert

Practice notes

The Commonhold and leasehold Reform act 2002 (CLRA 2002) permits developers of new residential schemes to provide a freehold option to prospective flat purchasers. This Practice Note examines the pros and cons of owning a freehold unit within a commonhold, as contrasted with a leasehold interest.

Background

Before 27 September 2004, when Pt 1 of CLRA 2002 commenced, leasehold tenure was the only realistic structure a developer could offer to would-be flat buyers. The burden of a positive covenant (for example, to pay service charge, insurance rent, and the like) can run with a leasehold estate only, not a freehold. Although this flaw could be overcome on a freehold disposal of a flat by imposing an estate rentcharge under the Rentcharges Act 1977 (RcA 1977), the practical position is that many mortgage lenders will not advance funds on the security of a freehold flat (see paragraph 5.7.1 of the UK Finance Mortgage Lenders’ Handbook (UKFML Handbook) and paragraph D.24 of the Building Societies Association Mortgage Instructions (BSA Instructions)); they consider a leasehold set-up far better suited to securing ongoing service provision and the enforcement of shared obligations...

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Russell Hewitson

Northumbria University

Russell Hewitson is a solicitor and associate professor of law at Northumbria University. He is Law Society Council member for commercial property and a member of the Law Society’s Conveyancing and Land Law Committee. Russell is the Consultant Editor of Halsbury’s Laws of England Volume 23 - Conveyancing. He is general editor of Precedents for the Conveyancer, Practical Lease Precedents, and Practical Conveyancing Precedents, consultant editor of the Law Society’s Conveyancing Handbook and has written a number of other books including Conveyancing Searches and Enquiries, Licensing Law Handbook, Residential Conveyancing Practice and Business Tenancies. He is also the Practice and Precedents Editor of The Conveyancer and Property Lawyer. ...

Web page updated on 21/05/2026

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