What is Tenure?
Tenure defines how a property is owned.
It sounds technical.
In practice, it shapes value, control, and how lenders view the case.
The main types are:
• freehold
• leasehold
• leasehold with a share of freehold
Each comes with different rights, costs, and constraints.
What is Freehold?
Freehold means you own the property and the land outright.
No landlord.
No lease dictating terms.
You control the property fully, but you’re also responsible for everything tied to it.
That includes maintenance, repairs, and the condition of the land itself.
Most houses are freehold.
From a lending perspective, this is usually the simplest structure.
Benefits of having a Freehold Property
- You own the property outright, so you have no lease that dictates terms of ownership
- You don’t have to deal with a freeholder (a landlord)
- You don’t have to pay ground rent, service charges or other landlord charges.
Owning a share of a freehold
What does share of freehold mean?
You can club together with other leaseholders and all agree to buy a share of the freehold from the landlord. For example, if you live in a block of flats, you might decide to purchase the freehold between you so that you have the right to manage the block yourselves and have more control over your homes and the associated costs to maintain them.
To purchase the freehold as a group, you will need at least half of the leaseholders to buy a share. It can be expensive to buy a freehold however, and you will need to find a managing agent to manage the building or you can set up a company yourself. For more information about buying a share of the freehold see The Leasehold Advisory Service website.
Commonhold Properties
Commonhold ownership is a type of freehold ownership. It helps flat owners acquire full ownership of their property, instead of having it on a lease. With commonhold properties, people within a block of flats club together to form a company called a Commonhold Association which then owns the building. If you need more information about this type of tenure you can visit the Government website GOV.UK
What is Leasehold?
Leasehold means you own the right to occupy the property for a set period.
You don’t own the land.
You have a legal agreement with the freeholder.
Most flats are leasehold.
The lease sets out:
• what you can and can’t do
• what you must pay
• how the building is managed
As the lease shortens, the property becomes less attractive to buyers and lenders.
Benefits of having a Leasehold Property
- There is less responsibility with this tenure type because the freeholder has to maintain the common parts of the building which can include entrance area, staircases, lifts, exterior walls, roofs and gardens.
Disadvantages of having a Leasehold Property
If you want to make any changes and do any work to your property, you will usually need to seek permission from the freeholder.
You may face other restrictions such as not being able to sublet or not being allowed to own a pet.
As a lease decreases in length the property value begins to diminish.
Costs involved with having a Leasehold Property
There are maintenance fees, annual service charges and a share of insurance costs.
There is usually an annual ground rate fee to pay.
It’s important to be aware that if you don’t fulfil the terms of the lease such as paying annual fees or ground rate then the lease can become forfeit and taken away from you so it is important to make sure you will be able to afford the annual charges if you are looking to become a leaseholder.
Leaseholder Rights and Obligations
- Peaceful enjoyment of the property;
- Reasonable access to the common parts of the building and/or grounds;
- Support, shelter and protection from the other parts of the building
- Access to all utilities and service media in respect of their own property;
- To have the common parts kept in a good state of repair and redecoration; and
- To benefit from services that are specified in the lease.
Leaseholders’ obligations:
- To pay ground rent
- To pay a proportion of the service charge, usually in advance of the accounting year;
- To contribute towards any reserve fund, either regularly, or at the time of re-sale or both;
- To keep their own flat in a good state of repair and decoration;
- To meet the cost of any damage they have caused to the common parts or grounds;
- To allow the landlord or manager access to the flat in respect of repairs or in emergencies;
- Not to use the flat for either commercial purposes or for unsuitable activities;
- Not to make excessive noise or cause nuisance to neighbours or visitors;
- Not to make structural alterations to the flat without the prior consent of the landlord; and
- Not to sublet the flat without the prior consent of the landlord;
What to do if you (as a Leaseholder) have a complaint
- Discuss your issue informally with other leaseholders in your building, ideally in person. If they are experiencing similar issues to you, you’ll be able to make a stronger case to the Freeholder together. Or you may find a Leaseholder who has already raised the issue and experienced a successful resolution. In which case, you can learn from their experience
- Try to resolve your issues directly with the Freeholder. Minor disputes can usually be resolved either face to face or in writing. If the Freeholder has a large portfolio of freeholds, they have likely appointed a management company, so you will need to contact them instead of the individual.
- If the Freeholder or managing company is not being reasonable, you can approach The Association of Residential Managing Agents (ARMA) which sets out minimum standards for its members and provides Leaseholders with legal help.
ARMA membership is voluntary so check to see if your Freeholder or managing company is a member at www.arma.org.uk.
Common Arguments between Leaseholders and Freeholders
Leasehold structures often create tension.
Common issues:
• rising service charges
• large repair bills
• disagreements over maintenance standards
• restrictions on changes or subletting
These don’t just affect living experience.
They can affect saleability.
Important Considerations with Leasehold Tenure
When looking to buy a leasehold property, there are a number of important considerations to take into account before you make your final decision.
How many years are remaining on the lease?
If there are less than 70-80 years remaining, you might struggle to get a mortgage because lenders will usually request you have a lease that runs for another 30 years beyond the end of your mortgage term. If you are selling a property with less than 70 years on the lease, it will be harder to sell, because the buyer will struggle to get a mortgage.
Extending the lease
If you have a short lease, you can ask to extend the lease at any time once you have owned your property for 2 years. The freeholder will charge you for an extension which will vary depending on your property. You will most likely need to use the services of a solicitor when looking at extending a lease.
You can find out more about extending the lease on the Government site GOV.UK
How you'll budget for service charges and related costs
As mentioned, you will have annual charges and costs to pay with a leasehold property, so you will need to factor this into your budgeting and consider carefully before you make a commitment to bu
Why tenure changes outcomes
Tenure isn’t just legal structure.
It affects:
• property value
• mortgage availability
• ongoing costs
• ease of resale
For example:
A short lease can restrict lender choice.
High service charges can reduce affordability.
Restrictions in the lease can limit how the property is used.
This is where similar properties start to diverge.
Final considerations
Tenure shapes how a property behaves in the market.
Not just legally.
Financially.
Two similar flats can price differently purely because of lease length or structure.
Understanding tenure early helps avoid surprises later.
See How Lenders Are Likely to Read Your Case
Most borrowers compare rates before they know whether a lender will actually like their case.
That’s how people waste time with the wrong bank, get weaker offers, or end up with avoidable declines.
The readiness check gives you an early read on how your case is likely to land, where the pressure points are, and whether lender choice needs more care.
- Avoid wrong lenders
- Spot pressure points
- Understand case fit
- Check before applying
See How Lenders Are Likely to Read Your Case
Mortgage Readiness Check
See how lenders will read your case.
Whether the income pattern looks stable enough to rely on, and how much of it they are prepared to include.