Leasehold vs Freehold vs Share of Freehold Which Is Best for London Home Buyers
For anyone buying property in London, ownership structure matters almost as much as location. Leasehold, freehold and share of freehold are not just legal definitions. They shape control, cost, long term value and day to day living.
Confusion around these terms often leads buyers to make assumptions that do not hold true in practice. In London, the best option depends on how you plan to live in the property, how long you intend to own it and what level of responsibility you are willing to accept.
This article explains the differences clearly and helps London home buyers decide which structure is best for them.
Understanding the Three Ownership Types
Before comparing value, it is important to understand what each structure actually means.
Leasehold
With leasehold, you own the property for a fixed number of years but not the land it stands on. The land and building are owned by a freeholder. Most London flats are leasehold.
Key characteristics include:
Ownership for a defined term
Payment of service charges for building upkeep
Limited control over common areas
Rights and obligations set out in the lease
Leasehold is common in mansion blocks, conversions and modern apartment buildings across London.
Freehold
Freehold means you own both the property and the land beneath it outright. There is no time limit on ownership.
Typical features include:
Full control over the property
No ground rent or service charges
Responsibility for maintenance and repairs
Greater freedom to alter the property subject to planning rules
In London, freehold usually applies to houses rather than flats.
Share of Freehold
Share of freehold is a hybrid structure. You own a leasehold flat but also own a share in the freehold of the building, usually through a company with the other flat owners.
This structure offers:
Long or extendable leases
Collective control over the building
Shared responsibility for maintenance
Greater influence over costs and management
Share of freehold is common in smaller period conversions.
Control and Decision Making
Control is often the deciding factor for buyers.
Freehold offers the highest level of control. You decide how and when work is done and what changes are made, subject only to planning regulations.
Leasehold offers the least control. Decisions on maintenance, improvements and costs are typically made by the freeholder or managing agent.
Share of freehold sits in the middle. Owners collectively decide on management matters, which can be empowering but also requires cooperation.
Savills commentary frequently notes that buyers underestimate the responsibility that comes with shared decision making.
Costs and Ongoing Financial Commitment
Ownership structure directly affects running costs.
Leasehold properties usually involve service charges and sometimes ground rent. These cover communal maintenance, insurance and management. Costs vary widely depending on building quality and management.
Freehold properties avoid service charges, but owners bear all repair and maintenance costs themselves. This can be unpredictable, especially for older houses.
Share of freehold properties involve shared costs agreed between owners. These are often more transparent, but unexpected works can still require large contributions.
Knight Frank research highlights that buyers should focus on predictability of costs rather than simply whether charges exist.
Resale Value and Market Perception
Market perception differs across ownership types.
Freehold houses are generally viewed as the most desirable, especially for families. They often command a premium and have strong resale demand.
Leasehold flats sell well in central London when lease length is long and building quality is high. Problems arise mainly with short leases or poor management.
Share of freehold flats are often attractive to experienced buyers, but can concern those wary of shared responsibility.
Liquidity depends more on location, layout and condition than ownership structure alone.
Lease Length and Its Importance
For leasehold and share of freehold properties, lease length is critical.
Long leases, typically above ninety years, are viewed positively by lenders and buyers. Short leases reduce value and complicate resale.
Share of freehold often allows lease extensions to be granted internally, which can be a significant advantage.
Savills Research consistently identifies lease length as one of the strongest drivers of pricing differences among London flats.
Responsibility and Lifestyle Fit
Each ownership type suits a different lifestyle.
Freehold is best for buyers who want autonomy and are comfortable managing a property.
Leasehold suits buyers who prefer convenience and are happy for building management to handle maintenance.
Share of freehold appeals to buyers who want influence without full responsibility, provided they are comfortable working with neighbours.
There is no universally superior option, only the one that fits your expectations.
Which Is Best for Different Buyers
For family buyers planning long term residence, freehold houses often make the most sense.
For professionals and international buyers seeking lock up and leave living, well managed leasehold flats can be ideal.
For buyers wanting a balance of control and convenience, share of freehold can work well when the building is small and well run.
According to Knight Frank Private Office insights, the most satisfied buyers choose ownership structure based on lifestyle rather than perceived status.
Common Mistakes Buyers Make
Many buyers assume freehold is always better. Others avoid leasehold entirely without understanding lease quality.
The most common mistakes include:
Ignoring lease length
Overlooking management quality
Underestimating maintenance responsibility
Assuming shared freehold means no conflict
Experienced buyers focus on fundamentals rather than labels.
Final Thought
Leasehold, freehold and share of freehold are not good or bad in isolation. They are tools that suit different needs.
In London, where housing stock is diverse and historic, each structure plays a valid role. The best choice depends on how you want to live, how long you plan to stay and how involved you want to be.
Smart buyers do not ask which ownership type is best in theory.
They ask which is best for them.
In London property, understanding the structure is not optional.
It is essential to making the right decision.