Freehold vs leasehold: what's the difference when selling?

What is the difference between freehold and leasehold?

Freehold is full ownership. You own the building and the land it sits on, with no time limit and no landlord above you. Leasehold is time-limited ownership. You own the right to live in the property for the number of years left on the lease, but the freeholder owns the land and the structure around you.

In England and Wales most houses are sold freehold and most flats are sold leasehold, because flats share a building and someone has to be responsible for the roof, the hallways and the structure. That is why the freehold-or-leasehold question matters most to people selling a flat.

Does leasehold make my home harder to sell?

Not on its own. A flat with a long lease, a clear service charge and no unusual ground rent sells much like any other home. The difficulty starts when the lease gets short, when the ground rent is high or rises sharply, or when service charges are unclear, because a buyer's mortgage lender looks at all three before agreeing to lend.

The single biggest factor is the number of years left on the lease. The longer it is, the less a buyer has to think about it.

Why does the 80-year mark matter so much?

Because of a cost called marriage value. Marriage value is the extra amount a freeholder can charge to extend a lease once it drops below 80 years, and under the current rules the leaseholder has to split that value with the freeholder. In plain terms, letting a lease slip under 80 years can add thousands of pounds to the cost of extending it, and buyers know that.

The Leasehold and Freehold Reform Act 2024 became law in May 2024 and is designed to abolish marriage value, which would make extensions cheaper for people with short leases. The key point for anyone selling now is that the main valuation reforms are not yet in force. Commencement is expected in late 2026 at the earliest, with full effect widely expected later still, so today's rules, including marriage value, still apply to a sale happening this year.

What should I do before I put a leasehold home on the market?

1. Find your lease and check the exact number of years remaining. The figure on an old valuation or your memory is not enough; the lease is the source of truth.
2. Gather your service charge and ground rent figures for the last few years, plus any major works planned. Buyers and their lenders will ask, and having it ready keeps the sale moving.
3. If the lease is anywhere near 80 years, get a lease-extension quote before you list, so you can decide whether to extend yourself or price the flat to reflect the work the buyer will face.
4. Ask more than one local agent how they would value and market the flat. A good agent prices a leasehold property on its real lease length and costs, not on a hopeful round number.

The number of years left on a lease is not small print. It is one of the biggest things a buyer's lender looks at, and the one thing you can find out today.

Knowing your tenure and your lease length is the start of pricing a sale correctly. ValuQ is a platform that gives UK homeowners free, side-by-side valuations from competing local estate agents, so you can compare what your home is worth, and how each agent would handle a leasehold sale, before you speak to anyone. For homeowners it is free, always.