What is a leasehold?
Including your rights & the current ground rent scandal

Millions of people own a leasehold property, but this type of home ownership can be complex. Here we explain what a leasehold property is, your rights and how to complain if something goes wrong – and importantly what's being done to help those caught up in the 'doubling ground rents' controversy.
In this guide
This is the first incarnation of this guide. Please give us feedback, suggest improvements and share your tips in the Leasehold forum thread.
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Leasehold explained
When buying a property in England or Wales there are two main types – freehold and leasehold. In a nutshell, they mean the following...
Freehold: Someone who owns the freehold of a property owns the property and the land it stands on.
Leasehold: Unlike a freeholder, as a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property from the freeholder for a number of years, decades or centuries.

Most flats are sold as leasehold properties with the freehold held by the builder or a firm he or she has sold the freehold to. However, this isn't always the case. Some flats – especially in houses converted into many flats – are sold on the basis that the owner shares the freehold with others in the same building, known as 'share of freehold'.
Houses tend to be sold as freehold properties as it's a more clear-cut scenario, given there's only one property on that piece of land. Controversially, however, this has not always been the case with new-builds homes in recent years.
There is a rarer, third type, called 'commonhold', explained below.
If you live in Scotland or Northern Ireland it's different
Due to onerous clauses in leases, a scandal has emerged in recent years, meaning roughly 12,000 leaseholders are facing ground rents – which they pay to the freeholder – that double in cost, usually every 10 years, but sometimes more frequently.
Some new-build houses were even sold with such leases sneakily attached, despite houses generally being sold on a freehold basis, as mentioned above.
Spiralling ground rents have made properties practically unsellable, with owners often left unable to remortgage too.

What is being done about fast doubling ground rents?
The Government has begun ushering in reforms to help alleviate the problem, although there are calls for more to be done to help those affected.
Leading property developers and freeholders also signed a pledge in March 2019 to get rid of exorbitant ground rents for existing and future leaseholders, though this was not mandatory and it's not clear how many smaller freeholders signed up.
Currently, a Competition and Markets Authority investigation is underway to determine whether leasehold homes were mis-sold in the first place. We will update this guide when its findings are published, although at this stage we can't say whether these would actually lead to any form of redress.
Leaseholds have lifespans – so steer clear of short ones
Owning the leasehold gives you the right to live in a property for a set period of time – which can be years, decades or centuries.
But it's important to understand that in the eyes of the law, you're essentially a tenant of the freeholder for that period. Also, you don't technically own the property, you own the lease – even though you can obviously buy and sell the physical property.

Under most lease agreements you will have to pay an annual ground rent, which can increase over time. This shouldn't be too expensive, but in recent years a growing trend has seen some leaseholders subject to exorbitant rents.
Historically a typical lease length was 99 years, although more recently 125 years has become the standard, while some last as long as 999 years. However, any lease under 80 years is dangerous territory and something to be wary of when buying a leasehold property as it can make it difficult to remortgage. See more on this.
Freehold explained
In contrast, owning the freehold means you own the property outright including the land it's built on, for an unlimited period. Interestingly, the Civil Aviation Act 1982 means you'll also 'own' and have rights to the 'airspace' above your property up to about 500 feet.
Meanwhile, beneath your feet, in theory there's no limit to the depth at which you cease to own the land your property is built on – although this is largely because it's not been tested in court.
But as you own the property as well as the land, it also means you are responsible for all the upkeep and any repairs.
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Should I buy a leasehold property?
It might seem after reading this guide that buying a leasehold property isn't worth the hassle. But far from it. If you've fallen in love with a property that happens to be leasehold, there's no reason you shouldn't go ahead and purchase it. Leases themselves aren't an issue – it's bad leases that are the issue.
The key considerations are that it's not caught up in the leasehold scandal and that it has a long enough lease length as a starting point.
In fact, there are even some pros to buying a leasehold over a freehold, for example:
You shouldn't have the headache of dealing with the upkeep and repairs of any communal areas in and around the property or negotiating with neighbours to get it sorted (remember to check this in the terms of your lease)
Terms in your lease mean if you're having any issues, for example with noisy neighbours, this can be dealt with. A freeholder's only course of action is taking the complaint up directly with the police.
The buildings insurance will normally be sorted for you by the freeholder.
Any other issues should be picked up by your solicitor before you purchase the property – as they would be with any other kind of property type – giving you time to change your mind if needed. This is where the primary issue of the leasehold scandal lies, in that solicitors and conveyancers haven't fully explained the risks of buying a leasehold.
Leaseholder rights & how to complain

Even if you've properly vetted the terms of your lease before moving in, you may still run into issues. There are any number of things that could trigger a dispute with your freeholder and all of them could be grounds for you to complain.
As a leaseholder you have a right to gain information about your service charge and any insurance paid, know the name and address of your freeholder, be consulted about certain maintenance and running costs and challenge certain charges under some circumstances.
In reflection of this, according to the HomeOwners Alliance, some common causes of disagreement include high service or administration charges, high cost of buildings insurance, poor appointment of managing agent by the freeholder, a breach of the lease terms and being denied the chance to buy or extend the freehold.
It's worth noting that your freeholder may have appointed a managing agent to act on its behalf. Unless your complaint is specifically about the managing agent, you may wish to complain to the freeholder in the first instance.
What to do if you have a complaint
Step 1. Speak to other leaseholders (informally)

If you're on an estate, or live in a block of flats, other leaseholders may have faced similar issues to you. It's worth having an informal chat with your neighbours (in person is probably best), because if they've had a similar dispute (whether or not they've raised it as an issue yet), you'll be able to make a stronger case to the freeholder if you complain together. Or if they've had a successful resolution, you'll know what to do.
Step 2. Try to resolve any issues with the freeholder directly
Some disputes, especially those that are relatively minor, may be resolved by setting it out in writing to the freeholder, or even doing so face-to-face.
If your freeholder is an individual, it should be fairly simple to get hold of them. If your freeholder is an investment company, or an individual with a large portfolio of freeholds, it's likely they'll have appointed a management company – and that's what you should contact initially.
Consult your tenants' association (if you have one)
The freeholder will have to consult with your tenants' association about major work and long-term changes to agreements and the association may be able to guide you in your dispute.
Step 3. Use a mediation service to settle the dispute
You can use an independent and impartial mediator to act as a 'middleman' between you and the freeholder to try to settle a case without having to take it to tribunal. The decision isn't legally binding, but you have to go down this route before going to a tribunal.
Typically a company offering mediation services will be accredited by a recognised body and will be a solicitor, surveyor or accountant. The Ministry of Justice has a searchable database of civil mediation providers in your area. The cost will be dependent on how much you're claiming in your dispute, but starts at about £50 plus VAT for a one-hour session.
Step 4. Apply to tribunal

If you've exhausted the options above, you can apply to the First-Tier Tribunal (Property Chamber – Residential Property), or FTT. This tribunal is independent of the Government and will listen (at a hearing) to both sides of an argument before making a decision.
Any leaseholder or freeholder can take a case to the FTT – there's no requirement to be a member of any particular scheme. If you want help or advice before applying, you can go to the Leasehold Advisory Service or Citizens Advice.
Step 5. Appeal if you're unhappy with the outcome
If you're unhappy with the decision you may be able to appeal to a different tribunal – the Upper Tribunal (Lands Chamber) – but you'll need to have first applied to the FTT.
You must ask the FTT for permission to appeal and you must do this within 28 days of its decision. It may decide to reopen the case itself rather than pass it to the Upper Tribunal.
If your case is complex, hinges on a legal argument or is in respect of a large financial sum then it may be transferred to the Upper Tribunal without you making an appeal. The Government appeals site has more information on how to appeal against a decision.
Quick questions on applying to tribunal