ValuQ Property Glossary
Leasehold and freehold
Leasehold has more jargon per square foot than any other corner of UK property, and reform is arriving in stages, which makes precision matter more, not less. Here is the whole vocabulary, as the law stands now.
45 terms · Last reviewed 24 July 2026.
Freehold
Freehold is outright ownership of a property and the land it stands on, indefinitely.
Most houses are freehold. No lease running down, no ground rent, no landlord above you.
Related: Leasehold, Share of freehold
Leasehold
Leasehold is owning a property for the fixed term of a lease while the land, and usually the building, belongs to a freeholder.
Almost all flats in England and Wales are leasehold. The lease is the rulebook of the arrangement: read it before you commit to it.
Related: Lease, Freehold · Freehold vs leasehold when selling →
Leasehold house
A leasehold house is a house sold on a lease rather than freehold, a structure with little justification that new legislation has moved to ban for new sales.
Existing leasehold houses remain, mostly historic or from the 2010s developer era that triggered the scandal. Owners generally have rights to buy their freehold.
Related: Ground rent, Collective enfranchisement
Commonhold
Commonhold is the alternative to leasehold where flat owners own their units outright and jointly own the building through an association, with no landlord and no expiring term.
Legally available since 2002, vanishingly rare in practice, and the government's stated long-term successor to leasehold. For now you will meet it in policy debate more than on the market.
Related: Leasehold
Flying freehold
A flying freehold is part of a freehold property extending over or under someone else's, like a room above a shared passageway.
The legal wrinkle is enforcing support and repair between the overlapping owners. Small flying freeholds are common and lenders tolerate modest ones; large ones need structure.
999-year lease
Also known as: virtual freehold
A 999-year lease is a lease so long it behaves economically like freehold, often called a virtual freehold.
With a peppercorn rent, it is as good as leasehold gets. The management and service charge machinery of the building still applies.
Related: Peppercorn ground rent, Unexpired lease term
Head lease and underlease
Also known as: sublease, superior landlord
A head lease sits between the freehold and the flat leases, making the head leaseholder the immediate landlord of the flats beneath it.
Layers mean more parties to consent, notice and charge fees on a sale. Your solicitor maps the ladder; you budget for its toll booths.
Related: Leasehold, Licence to assign
Demise
Also known as: demised premises
The demise is exactly what a lease grants you: which walls, floors, windows and spaces are yours, and which remain the building's.
It decides whose insurance and whose bill when something fails. Windows and balconies are the classic edge cases, answered only by the lease's own words.
Related: Lease
Lease
A lease is the contract granting ownership of a property for a fixed term on conditions, covering rent, repairs, conduct and consents.
Every leasehold question comes back to its wording. It is long because it is the constitution of the building.
Related: Demise, Unexpired lease term
Unexpired lease term
The unexpired term is how many years a lease has left to run, a number that directly moves the flat's value and mortgageability.
Lenders set minimum terms, commonly wanting decades remaining beyond the mortgage. The number every listing of a flat should state, and every buyer should check first.
Related: Short lease, The 80-year threshold and marriage value
Short lease
A short lease is one with few enough years left that mortgage lenders retreat and the price discounts toward cash buyers.
Below roughly 80 years the extension cost rises sharply under current law; far below that, mainstream lending thins out. Short-lease flats trade, but on different maths.
Related: The 80-year threshold and marriage value, Lease extension
The 80-year threshold and marriage value
Marriage value is the extra value released when a short lease is extended, which current law makes leaseholders share with the freeholder once a lease falls below 80 years.
It is why extending at 81 years costs meaningfully less than at 79. The 2024 reform Act abolishes marriage value from the calculation, but that part of the Act was not yet in force as of July 2026, pending secondary legislation and live litigation. Until it commences, the 80-year cliff remains real.
What to watch: A lease drifting toward 80 years is a decision with a deadline under current law. Waiting for reform to commence is a gamble on timing nobody can currently date.
Related: Lease extension, Short lease
Ground rent
Ground rent is the annual payment a leaseholder makes to the freeholder simply for occupying the land, distinct from service charges.
New residential leases granted since June 2022 are restricted to a peppercorn. Older leases keep whatever their terms say, which is where the trouble lives.
Related: Peppercorn ground rent, Escalating and doubling ground rent
Ground rent review
A ground rent review is the lease clause setting when and how the ground rent increases over the term.
Review patterns range from fixed steps to inflation-linked formulas. The review clause, not today's figure, is what lenders and buyers actually read.
Related: Escalating and doubling ground rent
Peppercorn ground rent
A peppercorn ground rent is a rent of no financial value, keeping the lease valid while costing the leaseholder nothing.
The statutory standard for new leases since the Leasehold Reform (Ground Rent) Act 2022, and the outcome of a statutory lease extension.
Related: Ground rent
Escalating and doubling ground rent
Escalating ground rent rises over the lease term by a formula, with doubling clauses, rents doubling every ten or so years, the notorious case.
Short-interval doubling can make a flat unsellable and unmortgageable as the numbers compound. Developers' variation schemes and lender rules have defused some, not all.
What to watch: Check the review clause before buying or listing any leasehold. A doubling clause found late kills sales at the mortgage stage, after everyone has spent money.
Related: Onerous lease terms, Deed of variation
Onerous lease terms
Onerous lease terms are clauses harsh enough to hurt a flat's value or mortgageability: aggressive rent reviews, steep fees, or unreasonable restrictions.
Lenders keep lists of what they will not accept. The cure is a deed of variation with the freeholder, negotiated or bought.
Related: Escalating and doubling ground rent, Deed of variation
Service charge
A service charge is the leaseholder's share of the building's running costs: maintenance, insurance, cleaning, lifts and management.
Charges must be reasonable and consultable, and leaseholders can challenge them at tribunal. Buyers read three years of accounts for a reason.
Related: Reserve fund, Section 20 major works
Buildings insurance on leasehold
In most leasehold buildings the freeholder insures the structure and leaseholders pay their share through the service charge.
Flat owners insure contents only, and a buyer's lender will want the building policy's details. Who insures is answered by the lease, not by habit.
Related: Service charge, Demise
Reserve fund
Also known as: sinking fund
A reserve fund is money collected through service charges and saved toward future major works, like roofs and lifts.
A healthy fund means the big bill is already partly paid; an empty one means it is coming as a lump. Check the balance and the building's works plan together.
Related: Section 20 major works, Service charge
Section 20 major works
Section 20 is the statutory consultation freeholders must run before major works costing any leaseholder more than £250, or long contracts over £100 a year.
Skipping consultation caps what can be recovered from leaseholders. A live Section 20 notice on a flat you are buying is a bill with your name on it: ask for the estimates.
What to watch: Sellers must disclose live or pending major works honestly. A buyer discovering a five-figure works bill post-completion is a claim, not a surprise.
Related: Service charge, Reserve fund
Managing agent
A managing agent is the company the freeholder or management company appoints to run the building day to day and administer the charges.
They also produce the management pack when you sell, at a fee, at their speed. Order it the day you list.
Related: LPE1 management pack
Management company
A management company is the entity the lease makes responsible for the building's upkeep, sometimes freeholder-owned, sometimes the residents'.
On sales it is a third party to notify, obtain packs from and sometimes join, via share or membership transfer. Its identity is in the lease.
Related: Residents' management company (RMC), Managing agent
Residents' management company (RMC)
A residents' management company is a company owned by the flat owners themselves that runs the building under the lease.
Selling a flat in an RMC building usually means transferring your share in it to the buyer. Control comes with committee work; someone has to chase the roofer.
Related: Right to Manage (RTM), Share of freehold
Right to Manage (RTM)
The Right to Manage lets qualifying leaseholders take over their building's management from the freeholder through an RTM company, without buying the freehold and without proving fault.
A statutory process with qualifying thresholds. It moves the management, not the ownership: ground rent and the lease itself stay as they were.
Related: Residents' management company (RMC), Collective enfranchisement
Freeholder
Also known as: landlord
The freeholder is the ultimate owner of a leasehold building's land and structure, the landlord the lease answers to.
Ranges from institutional investors to the residents themselves. Who they are shapes how the building feels to own.
Related: Absent freeholder
Absent freeholder
An absent freeholder is one who cannot be found, leaving nobody to collect rent, insure properly, or issue the consents a sale needs.
Statutory routes exist, including tribunal-dispensed lease extensions and missing-landlord procedures, plus indemnity insurance for the gaps. Slower and costlier than a present landlord, not hopeless.
Related: Indemnity insurance
Right of first refusal (flats)
The right of first refusal obliges a freeholder selling a building of flats to offer it to the qualifying leaseholders first, on the same terms.
A criminal-backed obligation under the Landlord and Tenant Act 1987, distinct from any private first-refusal agreement. Buildings change hands around it more often than they should.
Related: Collective enfranchisement
LPE1 management pack
Also known as: leasehold pack, management pack
The LPE1 is the standard information pack about a leasehold property's charges, works, disputes and insurance, completed by the freeholder or managing agent for a sale.
It costs a few hundred pounds and its turnaround time routinely sets the pace of a flat sale. Ordering it at listing rather than at offer buys back weeks.
Related: TA7 Leasehold Information Form, Managing agent
Licence to assign
A licence to assign is the landlord's formal consent to a lease being transferred to a buyer, where the lease requires it.
More common in older and mixed-use leases. Where required, it adds a party, a fee and a timetable to the sale.
Related: Head lease and underlease
Licence for alterations
A licence for alterations is the landlord's written consent to works a lease restricts, from wood floors to wall removals.
Works done without a required licence surface at sale as a retrospective licence negotiation or indemnity insurance, with the freeholder holding the leverage. Consent first is cheaper than consent later.
What to watch: Before altering a flat, read the alterations clause. Before selling an altered one, find the licence, or start the conversation early.
Related: Deed of variation, Indemnity insurance
Notice of transfer and notice of charge
Notices of transfer and charge are the buyer's solicitor's formal notifications to the freeholder that ownership changed and a mortgage now exists, each usually carrying a fee.
Administrative box-ticking with a price tag, required by the lease. The fees appear in the LPE1 so nobody can pretend surprise.
Related: Certificate of compliance
Certificate of compliance
A certificate of compliance is the freeholder's confirmation that a sale met the lease's requirements, needed when a restriction on the title demands it before the buyer can register.
Another small leasehold toll: a fee, a form, and a wait that conveyancers chase.
Related: Restriction on title, Notice of transfer and notice of charge
Deed of covenant (leasehold)
A leasehold deed of covenant is the buyer's direct promise to the freeholder or management company to observe the lease and estate obligations.
Required by many leases on every sale, with a fee for the privilege. It is how obligations chain from owner to owner.
Related: Deed of covenant
Lease extension
A lease extension is adding years to a lease, either through the statutory route or by private deal with the freeholder.
The statutory route currently adds 90 years at a peppercorn rent, with the price set by a valuation formula. Informal deals can be quicker but can also reinstate ground rent or worse terms. The 2024 reform Act promises 990-year extensions and a leaseholder-friendlier formula, but those provisions were not yet in force as of July 2026.
Related: Section 42 notice, The 80-year threshold and marriage value
Section 42 notice
A Section 42 notice is the leaseholder's formal claim starting the statutory lease extension process, locking in the valuation date.
Serving it also lets a seller assign the claim to their buyer, which is how short-lease flats sell without waiting out the process. A specialist valuer before the notice is money well spent.
Related: Lease extension
Collective enfranchisement
Collective enfranchisement is qualifying flat owners joining together to buy their building's freehold from the landlord.
The whole prize: control, cheap future extensions, no ground rent. It needs enough participating flats, funding and stamina, and professional hands on the valuation and process.
First-tier Tribunal (Property Chamber)
Also known as: FTT, property tribunal
The First-tier Tribunal (Property Chamber) is the specialist tribunal deciding leasehold disputes: service charges, extension prices, management and more.
Cheaper and less formal than court, and where a challenged service charge or a disputed extension premium actually gets decided.
Related: Service charge, Lease extension
Forfeiture
Forfeiture is a landlord terminating a lease for breach, the leasehold system's most drastic and most criticised remedy.
Heavily fenced by statute for residential leases, with court process and thresholds. Its shadow is why leasehold arrears letters read the way they do.
Rentcharge
Also known as: chief rent
A rentcharge is a small annual sum charged on some freehold land, a historic device concentrated in particular regions.
Trivial in amount, non-trivial in consequence: archaic remedies for arrears alarm lenders. Rentcharges can be redeemed, and conveyancers flag them routinely.
Estate charges on freehold estates
Also known as: fleecehold, estate rentcharge
Estate charges are payments freehold homeowners on private estates make toward unadopted shared spaces, roads and landscaping.
Nicknamed fleecehold where charges run high with weak accountability. Reform legislation has begun extending leaseholder-style rights to estate homeowners; asking for the charge, the manager and the accounts before offering remains the practical defence.
Building Safety Act
The Building Safety Act 2022 is the post-Grenfell law reshaping responsibility for building safety defects, protecting many leaseholders from remediation costs.
It created qualifying leaseholder protections, remediation schemes and new duties for taller buildings. Flat sales in affected buildings now travel with its certificates and paperwork.
Related: EWS1 form, Cladding remediation
EWS1 form
An EWS1 is the external wall fire-safety assessment form lenders may request for flats in taller or cladded buildings.
One per building, graded by risk. Government and lender positions on when one is genuinely needed have loosened since the peak, but individual lenders still ask.
Related: Building Safety Act
Cladding remediation
Cladding remediation is the removal and replacement of unsafe external wall systems, funded through developer commitments, government schemes and, in protected cases, not the leaseholders.
For a sale, what matters is the building's remediation status and evidence: completed, funded and scheduled, or unresolved. Lenders price the difference.
Related: Building Safety Act, EWS1 form
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