Almost every flat in London is sold leasehold. The word frightens international buyers more than it should, and reassures them less than it should. Here is what it means, what it costs, and what to ask before you commit.
A leasehold flat is yours for a long fixed term. Someone else, the freeholder, owns the building and the land it stands on. You own the right to occupy your flat for the length of the lease, and the lease sets out what you may do, what the freeholder must do, and what you pay towards running the building.
This is not a loophole or a lesser form of ownership. It is how shared buildings are held in England and Wales, because a flat has no land of its own: it sits above and below other people's homes, and something has to govern the roof, the lifts, the corridors and the insurance.
The practical question is never "is it leasehold", because it almost always is. The question is what the lease says.
New-build flats are typically sold with leases of 990 or 999 years. At that length the remaining term is, for practical purposes, not a concern in your lifetime or your children's.
Older stock is different. As a lease shortens, extending it becomes more expensive, and lenders become more cautious about lending against it. The 80-year mark has long been the point where the cost of extending rises noticeably. Reform legislation has been changing how extensions are priced and who qualifies, so the position on any specific lease is a question for your solicitor rather than for a website.
For a new-build purchase this section is usually a formality. Read it anyway, because it is the one number that cannot be renegotiated later.
The service charge is your share of running the building. It typically covers buildings insurance, maintenance and repair of the structure and common parts, communal cleaning and lighting, lifts, grounds, and where they exist a concierge, gym, residents' lounge or landscaped podium.
It usually also includes a contribution to a reserve fund, sometimes called a sinking fund: money set aside now for major works later, such as replacing a roof or a lift. A building with no reserve fund is not cheaper to own. It has simply deferred the bill.
Service charges normally work in two steps. At the start of the year the managing agent sets a budget and you pay against that estimate. After the year end the actual spend is reconciled against what was collected, and you either receive a credit or a balancing demand. This is why a single quoted figure tells you less than two years of actual accounts.
New-build developments with extensive amenities cost more to run than a plain block. That is not a criticism of amenity, it is arithmetic: a pool, a gym and a twenty-four hour concierge are staff, energy and maintenance contracts, and they appear on your statement every year for as long as you own the flat.
Ground rent is a payment to the freeholder that historically had nothing to do with services received. The Leasehold Reform (Ground Rent) Act 2022 restricted ground rent on most new residential long leases to a peppercorn, meaning effectively nothing.
Older leases can still contain escalation clauses, where the rent doubles at fixed intervals. Those clauses have caused real problems for resale and for mortgage approval. If you are buying anything other than a new lease, this is a specific question to put to your solicitor in writing.
After the Grenfell Tower fire, lenders wanted assurance about external wall systems before lending on flats in taller buildings. The EWS1 form was introduced as a way for a suitably qualified professional to record that assessment. It is not a safety certificate and it is not required for every building; it is a lending document.
The Building Safety Act 2022 then created a wider regime for higher-risk buildings, including registration and a named accountable person responsible for safety.
What matters to you as a buyer is narrower than the debate around it: whether the building has the documentation your lender will ask for, and whether any remediation is planned that could appear in a future service charge or reserve fund demand. Both are questions your solicitor will raise in the report on title. Ask early, because the answer can affect timing.
Commonhold is an alternative to leasehold in which flat owners hold their homes outright and jointly own and manage the shared parts through an association. It has existed in law since 2002 but has been used very little in practice, and reform to make it the default tenure for new flats has been under discussion for years.
For a purchase today you should expect leasehold. Commonhold is worth knowing about because it explains the direction of policy, not because it changes what you are likely to be offered.
None of these are unusual requests. A developer or agent who is reluctant to answer them in writing has told you something useful.
Every point above is answerable before you commit money. The buyers who run into trouble are almost never the ones who bought leasehold; they are the ones who accepted a headline figure and never saw the accounts. Your solicitor reports on the lease before exchange, and that report is the moment to slow down and read.
This guide explains how leasehold generally works in England and Wales. It is not legal advice and does not address your circumstances or any specific property. Legislation in this area is changing; your own solicitor will confirm the current position and report on the actual lease before you exchange contracts.
We go through the lease terms, the service charge history and the building safety position on the specific flat you are considering, before you reserve.
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