What is the Difference Between Leasehold, Freehold and Commonhold?

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If a property is freehold it means that the land on which the propery is built is included in the price of the sale and therefore no ground rent or service charge is payable.

If a property is leasehold it means that the land on which the property is built is not part of the sale and therefore the buyer will be required to pay ground rent to the owner of the land - the freeholder. The length of a lease can vary greatly so it is vital to check with the lender that the lease length is acceptable. Holding a lease will give the buyer the right of possession but not ownership of the property. As well as having to pay ground rent, very often a service charge is also payable and covers repairs, maintenance, keeping of common grounds and this is common in flats.

If a property is commonhold, this means that the buyer can purchase the freehold of a flat, jointly with other residents of the flats and is known as a commonhold association. A service charge and ground rent are not payable although a commonhold association's expenses on insurance, maintenance and admin will be payable for common parts of the building.

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