The leasehold is exactly that: a lease. You might have bought the house or flat, but the freeholder is still your landlord, and you their tenant. The leasehold agreement will only be for a certain length of time and, once it expires, full ownership of the property reverts to the freeholder.
Unlike renting, you don’t get a new agreement when you move in – you just take over the lease from the previous owner. It’s therefore essential to know how many years are left on the lease and what the terms of the agreement are, which typically include ground rent, service charges and a share of maintenance.
What’s the alternative to a leasehold?
Owning the freehold, or a share of freehold. Although this means that you’re responsible – or partially responsible – for the maintenance of the building and surrounding land, you’ll never have to worry about the lease running out.
Ground rent and service charges
As a leaseholder, you’re only responsible for the condition of your own apartment. The maintenance and management of the rest of the building is the responsibility of the freeholder or their managing agent.