TL;DR: In England and Wales most flats and a smaller number of houses are sold as leasehold rather than freehold. Buyers accept leasehold because flats almost always have to be leasehold (the structure makes joint ownership of shared parts impractical otherwise), because well-managed blocks can be a cheaper way into desirable areas, because long modern leases (125 or 999 years) function in practice much like freehold, and because the rise of share-of-freehold and commonhold-style arrangements has reduced the historic disadvantages. The Leasehold and Freehold Reform Act 2024 ended new long leasehold houses (with limited exceptions) and capped some onerous ground rents. Leasehold is still the dominant flat tenure but is increasingly reformed.
Last reviewed May 2026
For buyers used to thinking of property ownership in absolute terms, the leasehold model can look like an inferior bargain: pay a substantial price, but actually rent the property from a freeholder for a long fixed term, with ground rent, service charges, and a clock ticking down on the lease. The question of why anyone would knowingly buy into such an arrangement is a fair one, especially after high-profile scandals around onerous ground rents on new-build houses.
This guide sets out the genuine reasons buyers continue to choose leasehold, the structural reasons flats are almost always leasehold in England and Wales, the trade-offs against freehold and emerging commonhold options, the situations in which leasehold is a poor deal, and the impact of the Leasehold and Freehold Reform Act 2024 on the modern market.
Why flats are almost always leasehold
The legal mechanics of freehold ownership in England and Wales do not cope well with shared structures. Freehold is ownership of "the land" for an indefinite period, but a flat in a block does not occupy "the land" in any straightforward sense: it shares a roof, common stairs, foundations, and external walls with other units. The traditional answer was to make the building itself freehold, owned by a freeholder or management company, and to grant each unit a long lease setting out the boundaries of the demise and the responsibility for shared parts.
The lease creates enforceable obligations between flat owners and the freeholder that would be hard to replicate by freehold covenant alone (the doctrine that positive covenants do not run with freehold land means freehold flats would have weak enforcement of repairs obligations). The lease, by contrast, is a tenancy at law and the covenants in it bind the current owner of the lease whoever they are.
Commonhold was introduced in 2002 as an alternative for flats, but uptake has been small. The 2024 reforms include further plans to expand commonhold for new flats, but the existing housing stock remains overwhelmingly leasehold. A buyer who wants to live in a flat in England or Wales in 2026 is, in practical terms, almost always buying leasehold.
Long modern leases behave like freehold in practice
The headline number that matters most is the length of the remaining lease. A new lease typically granted today on a flat is 125 years or 999 years (housing associations and large developers commonly use 990 or 999 years to avoid the historic concerns about lease-shortening). At lease lengths in the hundreds of years, the lease in practice does not "run down" within a normal ownership period.
The shorter end of the spectrum is where leasehold becomes a problem. A flat with 80 years or less remaining triggers "marriage value" on a statutory lease extension, which sharply increases the cost of extending. A flat with fewer than 70 years remaining will fail to meet most mortgage lenders' criteria. A flat with under 60 years is increasingly hard to sell at all. Buyers should always check the lease length before offering.
Ground rent and service charge schedules also matter. Modern leases granted under the Leasehold Reform (Ground Rent) Act 2022 must have a peppercorn (zero) ground rent on new long residential leases. The 2024 Reform Act extends restrictions and reform to existing leases. Buyers of older leases need to check whether the ground rent is fixed at a small amount, escalates by an index, or doubles at intervals (the last of which has historically caused the worst problems).
The practical reasons buyers still choose leasehold
Location is the first. Most flats in central London, in the cores of regional cities, and in popular city-fringe areas are leasehold. A buyer who wants to live in those areas at flat-style price points has no realistic freehold alternative. The leasehold structure is the cost of the location.
Cost is the second. Even setting aside ground rent and service charge, flats are usually cheaper per square metre than houses in the same area. For first-time buyers, downsizers, and single-person households, the leasehold flat is the way to get into the desired location at an affordable price.
Maintenance offloading is the third. A leasehold flat owner pays a service charge but in exchange has nothing to do with organising roof repairs, external decoration, building insurance, or communal cleaning. Some buyers welcome this: a busy professional who travels frequently may prefer a managed block to the responsibility of a freehold house.
Shared ownership and resident management are the fourth and fifth. Share-of-freehold arrangements (where the leaseholders collectively own the freehold through a management company) eliminate most of the freeholder-extraction concerns. Right-to-manage gives leaseholders the legal right to take over building management without buying the freehold. Both options soften the historic leasehold disadvantage.
When leasehold is a poor deal
New-build leasehold houses with rising ground rents were the high-profile scandal of the late 2010s. Buyers found themselves locked into houses whose ground rent doubled every 10 or 25 years, eventually rendering the property unmortgageable and unsellable. The Leasehold and Freehold Reform Act 2024 effectively bans new long leasehold houses with limited exceptions and reforms ground rents on existing leases.
Short leases (under 80 years remaining) are a problem regardless of property type. Marriage value, lender restrictions, and difficulty selling all combine to depress the property's value as the lease runs down. A buyer who is offered an unusually attractive price on a flat with a short lease should price in the cost of extending the lease (which can run from a few thousand pounds for a recently-fallen flat to tens of thousands on a 50-year lease in central London).
Onerous service charges are the other recurring issue. Some blocks have inflated management fees, opaque service charge accounting, or one-off "major works" bills running into tens of thousands of pounds for cladding remediation, roof replacement, or lift renewal. The service charge history for the past three to five years (and the upcoming major works schedule) should be requested from the seller's pack before exchange.
How the Leasehold and Freehold Reform Act 2024 changes the calculation
The 2024 Reform Act made significant changes to leasehold law. It abolished the marriage value premium on lease extensions on existing leases below 80 years (so extending a short lease has become significantly cheaper for many leaseholders), extended the statutory lease extension term to 990 years on flats, made it cheaper for leaseholders to acquire the freehold or to extend a lease, gave leaseholders a stronger right to challenge service charges, and reformed the rules on right-to-manage.
For buyers of existing leasehold property in 2026, the practical effect is that leasehold is now a more reformed and leaseholder-friendly tenure than it was even five years ago. A buyer considering a flat with, say, 90 years remaining and a peppercorn ground rent is on much firmer ground than they would have been pre-reform.
Some elements of the Act are still being commenced through secondary legislation, so the buyer should confirm with their conveyancer which reforms apply in full at the date of exchange. The overall direction of travel is towards making leasehold less of a structurally weaker form of ownership.
Comparing leasehold, freehold, and the emerging alternatives
For a house, freehold remains the gold standard and is now mandated for most new houses under the 2024 reforms. A buyer choosing between a leasehold house and a freehold house, all else equal, should choose freehold.
For a flat, the practical choice is between conventional leasehold, share-of-freehold leasehold (where the leaseholders collectively own the freehold company), commonhold (rare but expanding), and right-to-manage leasehold. Share-of-freehold is the strongest of the readily-available options because it eliminates the freeholder profit motive, gives the leaseholders collective control over the building, and makes it easy to grant 999-year lease extensions on a nominal basis.
For new-build flats, the development industry has been moving towards 999-year leases at peppercorn ground rent under the new statutory framework. A buyer of a new flat in 2026 should expect those terms; anything significantly worse should prompt questions.
How we verified this
The legal framework described here reflects the Law of Property Act 1925, the Landlord and Tenant Act 1985, the Commonhold and Leasehold Reform Act 2002, the Leasehold Reform (Ground Rent) Act 2022, and the Leasehold and Freehold Reform Act 2024. The Land Registry's published guidance on tenure has been cross-checked for the description of how leases are registered. Lender criteria on lease length reflect the published positions of UK Finance and the typical UK Finance Lenders' Handbook entries. No fabricated firm names, prices, or freeholder identities have been used.
Disclaimer: This article is general information about leasehold property in England and Wales. It is not legal or financial advice. Lease terms vary enormously between properties, and the impact of the Leasehold and Freehold Reform Act 2024 depends on which provisions are in force at the date of any transaction. Anyone buying a leasehold property should rely on their conveyancer's report on title and a careful read of the lease itself.
Frequently asked questions
Why would anyone buy a leasehold property?
For flats in England and Wales there is usually no choice: the legal structure of shared buildings makes long leasehold the standard. For other property types, buyers accept leasehold to access locations where leasehold is the dominant tenure, to benefit from professional building management without personal responsibility for major works, or to enter the market at a lower price point than freehold equivalents. The 2024 reforms have made the leasehold proposition significantly stronger than it was.
Is leasehold worse than freehold?
Freehold is structurally stronger ownership: no time limit, no ground rent, no service charge (other than on shared-services freehold estates), and no third party extracting fees. Leasehold can be effectively equivalent where the lease is long (125 years or more remaining), the ground rent is a peppercorn, the service charges are reasonable, and the block is well managed. The gap between the two narrows where these conditions hold and widens where they do not.
What is share of freehold?
Share of freehold is a leasehold arrangement where the freehold of the building is owned collectively by the leaseholders, usually through a management company in which each leaseholder owns a share. The individual still owns a long lease on their flat, but there is no third-party freeholder taking ground rent or marking up service charge work. Share of freehold is widely regarded as the strongest practical form of flat ownership available in England and Wales.
What is the minimum lease length for a mortgage?
Most mainstream lenders require at least 70 to 85 years remaining on the lease at completion, and many will require the lease to have a minimum number of years remaining at the end of the mortgage term (commonly 40 to 50 years). The exact thresholds vary by lender and are set out in their entries in the UK Finance Lenders' Handbook. A buyer of a flat with a shorter lease may need to extend it before or at completion.
Did the 2024 reforms abolish leasehold?
No. The Leasehold and Freehold Reform Act 2024 reformed leasehold but did not abolish it. It banned new long leasehold houses (with limited exceptions), made lease extensions and freehold purchases cheaper and longer (990 years for flats), removed marriage value, and strengthened leaseholders' rights on service charges and management. Plans to extend commonhold for new flats are progressing but flats granted before any future commonhold mandate remain leasehold.
