Why Would Anyone Buy a Leasehold Property?

Leasehold property ownership is often viewed with scepticism in the UK, particularly in light of recent controversies surrounding ground rents and management fees. But despite the headlines, leasehold homes still make up a significant portion of the property market, especially in cities and new developments. So, why would anyone buy a leasehold property—and is it really as bad as it sounds?

This guide explains what leasehold means, how it differs from freehold, and the pros and cons you need to weigh up before deciding.

What Is a Leasehold Property?

When you buy a leasehold property, you own the property itself—but not the land it stands on. Instead, you lease it from the freeholder (sometimes called the landlord) for a set period, usually 99 to 999 years at the start.

You’ll often find leasehold ownership in flats, maisonettes, and some newer houses. As a leaseholder, you're typically responsible for everything inside your property, while the freeholder manages the structure, roof and communal areas.

What Is the Difference Between Freehold and Leasehold?

If you own a freehold, you own the entire property outright, including the land it stands on. With a leasehold, you effectively have a long-term rental agreement with ownership of the property but not the land. Once the lease expires, ownership technically reverts to the freeholder unless the lease is extended.

Freehold usually gives you more autonomy, whereas leasehold comes with obligations, including paying ground rent, service charges and possibly gaining permission for structural changes.

What Are the Common Leasehold Challenges?

The main concerns around leasehold properties include:

• Ongoing costs like ground rent and service charges, which can increase

• Restrictions in the lease, such as limits on subletting or renovations

• Decreasing value as the lease term shortens

• Difficulty securing mortgages on short leases

• Lease extension costs, which can be expensive

• Managing agents who may be unresponsive or charge high fees

In some cases, leases also contain unfair clauses, though recent legislative reforms have started to address this.

Why Would Anyone Buy a Leasehold Property?

Despite the drawbacks, leasehold properties can still be worth considering—particularly in the following situations:

• Flats in shared buildings are almost always leasehold, so buyers in cities or on tighter budgets may have little choice.

• Leasehold homes are often cheaper than comparable freehold properties.

• Modern leasehold flats can be energy efficient and low maintenance.

• Developers sometimes include leasehold homes in Help to Buy and shared ownership schemes.

• Some buyers aren’t put off by the lease length, especially if there are 100 years or more remaining.

In short, leasehold can be a practical route onto the property ladder—especially for first-time buyers looking at flats in urban areas.

Are Leaseholds Harder to Sell?

They can be, especially if the lease has fewer than 80 years remaining. Buyers may struggle to get a mortgage, and the cost to extend the lease can put people off.

That said, many leasehold properties with long leases and reasonable charges sell without issue. If the lease has over 100 years remaining and the service charges are fair, most buyers and lenders will consider it as normal.

How Many Years Should Be Left on a Leasehold?

Ideally, you want at least 90 to 100 years remaining on the lease when you buy. Below 80 years, lease extension becomes more expensive due to something called “marriage value” being factored in. Once a lease drops below 70 years, many lenders will refuse to offer a mortgage.

If you're buying a flat with a lease under 90 years, you should factor in the cost and legal process of extending the lease. It’s often worth negotiating this with the seller.

Is It Difficult to Get a Mortgage on a Leasehold Property?

Not always. Mortgages are routinely approved for leasehold flats and houses—provided the lease is long enough. Lenders typically require at least 70 years remaining at the point of purchase and want to see manageable ground rent terms.

Problems arise with short leases or where ground rent clauses double every 10 or 20 years. These can make the property unmortgageable unless the lease is varied.

Can You Rent Out a Leasehold Property?

Usually, yes—but it depends on the terms of your lease. Some leases require permission from the freeholder to sublet, and others may include conditions, such as not allowing holiday lets or Airbnb rentals.

Before buying a leasehold with the intention to let it out, read the lease carefully and clarify with your solicitor whether subletting is allowed and what conditions apply.

Final Thoughts                       

Buying a leasehold property isn’t necessarily a bad decision, but it requires more due diligence. The key is to understand the lease terms, remaining length, and any associated costs. For many buyers—particularly in city centres or first-time buyer schemes—leasehold homes may be the only affordable or practical option.

If the lease is long, the ground rent is modest, and the freeholder is responsive, a leasehold can still represent a sensible investment. Just make sure you understand your rights and obligations before you commit, and always seek advice from a solicitor experienced in leasehold law.