The problems with leasehold ownership | Freehold vs leasehold: what's the difference?

From this video you will gain a better understanding of freehold and leasehold ownership. I also explain the issues with leasehold ownership and provide tips for buyers (especially first time buyers) who may be considering this type of property.

CONTENT
Welcome 00:00
What’s a leasehold property? 01:13
What’s a freehold property? 02:43
What are the problems with leasehold properties? 03:59
- Ground rent 04:12
- Service charge 06:55
- Diminishing lease term 08:37
- Historical building issues 09:11
- Alterations 10:11
- Restrictions 10:54
Lease enfranchisement… 11:42
- Statutory lease extension 11:57
- Collective enfranchisement (buying freehold) 14:17
Market value: freehold vs leasehold 16:12
Takeaways 18:06

LINKS USED/MENTIONED

ABOUT ME
I'm Lemuel. I'm not a financial advisor. I'm not an expert. I'm just a regular guy that enjoys talking about how we can do better with money.
If you want to learn more about how you can do better with money, then subscribe to the channel and hit the notification bell so you get an alert whenever I upload a video.

TOPICS
ground rent, service charge, diminishing leases, leasehold, freehold, freehold vs leasehold, lease enfranchisement, collective enfranchisement, statutory lease extension, leasehold property, freehold property, the problems with leasehold, extending your lease, buying the freehold, leasehold ownership, leasehold tips for first time buyers, short leases

DISCLAIMER
This video is not meant to address the specific circumstances of any particular individual. It is created for educational purposes only. You should not rely upon it as legal, financial or professional advice, or a substitute for it. I do not accept any liability whatsoever for errors, omissions or misstatements contained therein. You should consult a suitably qualified professional if you require specific advice or information.

[tilerman]

Very informative, thank you. One other point regarding leasehold flats is who owns the freehold/building. A friend of mine purchased his local authority flat. The flat shared a communal external landing running outside the front doors. The council decided the railings and front doors needed painting and my friend was presented with a bill just under £2000 for painting his front door and about 6 linear metres of railings outside his property. The work took a day and a half and because of his conditions didn't have a leg to stand on and had to pay up. That's a lot of money.

[dxox]

As a first time buyer! Your videos are so useful for me 😊 thank you so much ❣️

[naomi]

Wow, great video! We want to buy a city centre flat within the next couple of years, so we will make sure that we only go for properties that come with a share of the freehold. I can't thank you enough for sharing your knowledge.

[IvanAlmada-ygne]

Man, I worked a long time in a property shop they never thought me that...thank you for a very oawww thank you...

[joline]

Absolutely nothing wrong with videoing from a phone. Clear picture, the volume was good. What else do you need ?? Keep it up ✔👍💯🏠🏠🏠🏠

[erichl.liotta]

Thank you very much for this video.
I wish I had seen it earlier... so I shouldn't have had to figure it all out by myself!
You explained brilliantly every aspect of this matter that a first time buyer should be well aware of! Also... great advice!

[sal]

This was really useful. Thank you so much. Im starting to look at buying my own place so have been watching all your videos. I've seen a property that I really like but the lease is only 70years, because of this the price of the property is very affordable for me. Do you think it would be silly to buy? As I was hoping that once the new legislations are applied I could extend the lease.

[TheWellnessAbbey]

Thanks as always! I saw a new build for sale online that is a leasehold- I was surprised. Anyway, when I buy my investment flat I need to watch out for the length of the lease...

[karendemaynehopkins]

This video is really helpful! I’m currently looking for a place and for sure this information and clarification helps a lot! Tks

[Dr]

I just came here from your reply link to another video yes many thanks - another great informative video. Keep it up!

[joline]

Thomson Snell & Passmore are a very reputable firm of solicitors, dealt with them many times during my career in the legal field.
As an aside, these days it doesn't matter where you live in relation to which solicitors you use. Everything can be done over the net or by post. My own solicitors are approx 200 miles from where I live.
What you should do, when looking for a solicitor when purchasing property, is to ask how long the person who is going to deal with your matter s/he has been a solicitor or legal conveyancer. I would only go with someone who has been in this field for a minimum of 15 years, especially for a purchase (not so important for a sale) since they will then have experience in what pitfalls to look for. Experience counts !!

[raga]

Great video! as always

have you done one talking about moving from external building managers to self-management in leasehold buildings(flats) ?

[suewilson]

Thank you so much!!!! It is amazingly helpful. You opened my eyes!

[GoddardEmpire]

Leaseholds are a scam, people getting charged £1-5k or more for service charges. THATS NUTS!

[devikatamang]

Thanks. Please make a video on shared ownership.

[BellaDiary]

I think there's a lot of great information here BUT some of it isn't so accurate. If you own a leasehold house, with no communal areas, it's not true that you would pay a service charge. You would only pay that for areas where you're receiving a service. e.g. a flat in the city centre with a lift that needs paying for etc. Great video though :) Also, there are properties that are leasehold and have a lease of 999 years which is basically a freehold.

[sangeetsiv]

This is deffo in focus lol but I liked your earlier aesthetic, you were just shooting a bit too shallow, and that only works if you have a focus puller or maybe the Sony a700. Try sitting a bit further from your first cam if it's a DSLR, and if using your phone you can go tighter but sit further away from the background so it still looks a bit shallow and you don't have those deep shadows. I'll shut up if this is annoying because the content is still really good.

[leahcardzansi]

Hi thank you I have by chance stumbled across your video as I am in the process of saving for a down payment and was looking into the share ownership, this video thankfully has given me a head start on what I need to look for what questions I need to ask as I thought it was better to find accommodation through a housing association 😮 I have given myself to the middle of 2025 or beginning of 2026 to save for the deposit may I ask roughly for a 1-2 bed flat deposit would freehold property would I have to raise and have I given myself enough time to save for a down payment and additional fees.
Thank you I appreciate the time an effort you have taken to make these videos as I have only just started due to certain issues o would be jumping from the pot into the fire without knowing the pitfalls as not always something that is normally not easy to attain has many pitfalls that you don't see so I thank you and I will follow quite closely going forward stay blessed always 😊😊🙏🏼🙏🏼

[nikkion]

Recent government change meant that there will be no marriage value in lease extension.
This means lease extension becomes less cost prohibitive.
Nonetheless, learning from having my fingers burnt before, I recommend to stay away from leasehold property, it is not worth it the long term cost and stresses to trade off for a lower purchase price. Best of luck.

[phdw]

Why is there an associated leasehold length for a share of free hold and how does it affect the value of the property?