Have a Clear Idea of Choosing the Property Between Freehold vs. Leasehold 

Freehold vs. Leasehold Property: 7 Tips for Choosing the Right Property for You | The Enterprise World

When trying to buy or invest in real estate, you’ll frequently encounter the words leasehold and freehold. There are two primary types of homeownership: leasehold and freehold. Understanding the distinction between the two is critical before proceeding with a property purchase, as they include significantly different expenses and obligations.  

When a property is leasehold, ownership and transfer limitations apply, and the person who leases the asset from the owner for a certain amount of time. Conversely, a freehold property grants total ownership without any limitations on its development, alteration, or transfer. To learn more about the freehold vs. leasehold property kinds of characteristics, continue reading. 

What is freehold? 

When you own a property freehold, you are the owner of both the building and the surrounding land. 

You are responsible for everything related to the property, from your belongings inside to the building’s outside walls and roof. 

Therefore, you are free to alter the property’s construction in any way you see fit, provided you obtain the required planning approval from the local municipality, for as by constructing an addition. 

Also read: Freeholder Building Insurance: The Cornerstone of Property Protection

  • Owners’ Rights on Freehold Property: 

A freehold property owner has the freedom to do whatever they want with the property as long as it is within the scope of planning authorization. It implies individuals have the option to occupy the property, rent it out, sell it, or even tear it down and rebuild it if they so want, provided they get the required approvals and penalties from the relevant authorities. 

Freehold vs. Leasehold Property: 7 Tips for Choosing the Right Property for You | The Enterprise World

However, there are restrictions for freehold property owners. For example, they cannot disrupt their neighbors, break any covenants in their title papers, or carry out any unlawful activities on the land. 

What is a leasehold property? 

Freehold and leasehold are not the same thing. Ownership of a property gets leased for a predetermined amount of time. It often occurs over an extended period, with typical ranges being 125–999 years.   

Your property’s freeholder will have a contract with you that details what you are liable for. In addition to contributing to maintenance and service fees, you will probably be expected to pay particular yearly fees. 

Any substantial repairs to the property would often require approval from the freeholder, and there could be restrictions on things like pet ownership. 

If the lease expires, the freeholder will once again become the sole owner of the property. 

  • Owners Rights for Leasehold Property: 
Freehold vs. Leasehold Property: 7 Tips for Choosing the Right Property for You | The Enterprise World

A leasehold property is a kind of real estate ownership in which the owner has the right to use and occupy the land or property for a certain amount of time, as specified in the lease agreement. The “Lessor” is the person who grants the lease, and the “Lessee” is the person who accepts the lease. The Lessee does not own the land or property entirely; they have a contractual relationship with the lessor (the owner). The lease duration might vary, but it is 99 years. Unless the Lease Agreement includes a renewal clause, ownership rights revert to the lessor after the lease period. 

How to Decide Between freehold vs. leasehold property? 

Now that you are aware of the distinctions between freehold vs. leasehold property, the following are some things to think about before choosing between the two: 

1. Ownership Extent: 

The concept of leasehold implies you are the owner of the apartment. The land title is still held by the original owner. On the other hand, if you purchase a freehold property, you become the owner of both the ground and the building gets built on it. 

2. Unpredictability: 

Due to market changes, both the lease renewal and ownership are unpredictable. All of these features of freehold ownership are fully transparent. 

3. Rent: 

You have to pay an annual land fee as a lessee. Freehold homes are exempt from this type of rent. 

4. Maintenance Fees: 

In a leasehold ownership, you are responsible for maintaining the common areas. Ownership of a freehold house entails full responsibility for all upkeep and associated costs. 

5. Lease Duration: 

Freehold vs. Leasehold Property: 7 Tips for Choosing the Right Property for You | The Enterprise World

You can only possess a leasehold home for a set amount of time, as the concept of leasehold land implies. A freehold owner, on the other hand, is the owner for life. 

6. Right to modification: 

When rebuilding or altering a leasehold home, there were extra procedures to follow. Freehold house ownership does not impose any such restrictions. 

7. Access to loans: 

Compared to freehold vs. leasehold property, freehold ownership readily draws lenders, whether you want to borrow money for home improvements or a mortgage loan for the property. 

The vital thing to remember when deciding between leasehold and freehold ownership is to assess your preferences and long-term goals. 


Freehold vs. leasehold property ownership, on the other hand, refers to the legal distinction between the two types of property ownership. In a leasehold ownership arrangement, the original owner or freeholder of the property retains ownership of the land, and the flat or house on it gets leased to them for a particular term.  

In most circumstances, the lease will have a duration of 99 years or more. Ownership of the building and the land it gets constructed on is referred to as freehold. When it’s about mortgage financing, freedom in selling the property, and ownership clarity, freehold ownership is superior to leasehold ownership. When finances are tight, leasehold ownership makes sense; otherwise, freehold ownership is always preferable. 

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