Freehold vs Leasehold

Question 1

What is the difference between freehold and leasehold property?

Answer 1

Freehold: Absolute ownership of land and property indefinitely.

Leasehold: Right to occupy property for a fixed term under conditions set by the freeholder​.

Question 2

What are the advantages and disadvantages of freehold ownership?

Answer 2

✅ Full ownership with no time restrictions.
✅ Amounts to an investment - possible that value will rise.
✅ Greater control over property use.
❌ Higher upfront costs.
❌ Full maintenance responsibility/cost implication.
❌ Property value may fluctuate.
❌ Less flexible when disposing off property if business needs change.

Question 3

What are the advantages and disadvantages of leasehold ownership?

Answer 3

✅ Lower initial cost.
✅ Landlord responsible for majority repairs.
✅ Flexibility—lease can be assigned/surrendered.
✅ Security of tenure is likely to apply.
❌ Must pay ground rent and service charges.
❌ Lease loses value over time.
❌ Will have obligations towards landlord to comply with certain requirements e.g.,
maintain certain areas
❌ Likely to contain restrictions in terms of changing the property or
assigning the lease, etc.
❌ Money spent on rent will not be recouped - money will simply be gone