Leasehold vs Freehold: A New-Build Flat Buyer's Guide

If you are buying a new-build flat in Nine Elms or Battersea, you are almost certainly buying leasehold, not freehold. That is not a warning sign. It is how nearly all flats in England are owned. But it is worth understanding properly, because the words on the lease shape what you own, what you pay, and how easily you can sell.

Leasehold has a bad reputation, some of it earned. But the worst practices have now been reformed, and more reform is coming. What matters is knowing which parts still affect you today, and which are being fixed.

This guide sets out the real difference between leasehold and freehold, why your flat is leasehold, the two lease terms that decide value, and where the law now stands. Every material point links to its source.

For a new flat the question is rarely leasehold or freehold. It is whether the lease is long, the ground rent is low, and the building is well run.

The basic difference

Freehold means you own the building and the land it sits on outright, with no time limit. Leasehold means you own the property for a fixed number of years set by a lease, but not the land underneath. When the lease runs out, ownership returns to the freeholder. That is the core of it, as GOV.UK sets out.

In day-to-day life the difference is less dramatic than it sounds. A leaseholder with a long lease lives in their flat exactly as an owner does. The distinction shows up in three places: you pay a service charge and sometimes a ground rent to the freeholder, you may need permission for certain works or to sublet, and the lease is a wasting asset that gets shorter every year.

Freehold flats do exist, but they are rare and lenders are wary of them. Without a lease binding everyone, shared structure like a roof or foundations is hard to keep maintained. For flats, leasehold is the norm for a practical reason, not just a historical one.

Why your new-build flat is leasehold

Flats share walls, roofs, lifts, and grounds. Someone has to own and maintain those shared parts, and the lease is the mechanism that makes every flat contribute and sets the rules everyone follows. That is why a block of flats is almost always leasehold, with a freeholder or management company owning the structure and the common parts.

You will sometimes see “share of freehold” advertised. This means the leaseholders jointly own the freehold of the building, usually through a company they each hold a share in, while still holding a lease on their individual flat. It gives residents more control over service charges and management, and removes an outside freeholder taking a profit. It is common in small converted blocks. It is far less common in large new towers like those in Nine Elms, where the freehold and management usually sit with the developer or a professional freeholder. If a listing says share of freehold, treat it as a genuine plus, but check how the company is run.

Lease length: the number that quietly matters

On a brand-new flat this is rarely a worry, because new leases are usually granted for a very long term, often 990 or 999 years. But it is the first thing to check, and it matters a lot on any resale flat.

A lease is a wasting asset. As it gets shorter, the flat gets harder to mortgage and worth less, and extending it gets more expensive. The number that matters is 80 years. Once a lease drops below 80 years remaining, the cost of extending jumps, because the leaseholder has to pay “marriage value”: the theoretical increase in the flat’s value once the lease is extended, split 50/50 with the freeholder. Above 80 years there is no marriage value, so extending is much cheaper.

This is where reform helps. The Leasehold and Freehold Reform Act 2024 is designed to make extending easier and cheaper. It increases the standard extension term for flats to 990 years, up from 90, at a peppercorn ground rent, and it abolishes marriage value so a short lease is no longer punished. It also stops leaseholders having to pay the freeholder’s legal costs on top of their own.

The catch is timing. The Act is law, but the parts that change how extensions are priced are not in force yet. They wait on secondary legislation, and the government has said it expects to consult on the valuation rates during 2026, as the House of Commons Library records. One change that is already in force helps here: since February 2025 you no longer have to have owned the flat for two years before you can extend the lease or buy the freehold, so a new buyer can act straight away, per the HomeOwners Alliance.

For a new-build with a 990-year lease, none of this bites for generations. For an older Nine Elms or Battersea flat approaching or below 80 years, it is central, and worth pricing in before you offer.

Ground rent: mostly gone, but check the date

Ground rent is a charge some leaseholders pay the freeholder for nothing in return. Historically it was small, but some developers wrote in clauses that doubled the rent every ten or fifteen years, which could spiral into thousands of pounds and make flats hard to sell or mortgage. GOV.UK notes these clauses left leaseholders with spiralling payments with no benefit in return.

That has been fixed for new leases. The Leasehold Reform (Ground Rent) Act 2022 came into force on 30 June 2022 and restricts ground rent on most new qualifying long residential leases to “one peppercorn per year”, which in practice means nothing can be charged. The Act also bans freeholders from charging an administration fee for collecting a peppercorn rent, and breaches can draw fines of up to £30,000.

So the date on the lease matters. A flat sold on a new lease from 30 June 2022 onwards should carry no ground rent. Many Nine Elms and Battersea towers were completed before that date, and a lease granted earlier can still carry a ground rent with its own escalation terms. If you are buying a resale flat, or a new flat on a lease that was granted before mid-2022, ask for the exact ground rent and any review clause, and have your solicitor confirm it. This is not a reason to walk away, but it is a number you want to know.

Service charges and permission fees

Ground rent is separate from the service charge, which is the annual sum every leaseholder pays towards running the building. In amenity-rich Nine Elms and Battersea towers this is the larger and more important figure, and it deserves its own attention. We cover what is normal, how it is split, and what to check in the guide on service charges in Nine Elms and Battersea.

Leases can also carry administration or permission fees, for things like subletting, keeping a pet, or making alterations. They are usually modest, but ask your solicitor to flag anything unusual. It is the small print that can surprise buyers.

The reform picture, and what is actually in force

Leasehold is being reformed in stages, and it is easy to read a headline and assume a change already applies. Judge the flat in front of you on the law as it stands today, not on what is promised.

Here is where things sit in 2026. The Leasehold and Freehold Reform Act 2024 is law, but only limited parts are in force. The two-year ownership rule before extending or buying the freehold has gone, as of February 2025, and more leaseholders in mixed-use buildings can now take over management through the Right to Manage, as of March 2025. The bigger changes, including abolishing marriage value and setting the new valuation rates, still await secondary legislation, which the HomeOwners Alliance and the House of Commons Library both confirm.

Further ahead, the government wants to move new flats away from leasehold altogether. It published a Commonhold White Paper in March 2025 and has since produced a draft Commonhold and Leasehold Reform Bill. Commonhold is a different form of ownership in which flat owners hold the freehold of their own flat and jointly run the building, with no lease and no freeholder. The government’s stated aim is to make commonhold the default for new flats and ban new leasehold flats. The draft bill also proposes capping existing ground rents at £250 a year, falling to a peppercorn after 40 years.

That is the direction, but it is still a draft, not law, and the timing is not settled. The ban on new leasehold flats has been reported as unlikely to take effect within the current Parliament. So a flat you buy in Nine Elms today will be leasehold, and will stay leasehold for now. The reforms make that a better deal over time, but they do not change what you are buying this year.

What to check before you offer

Most of this is knowable before you commit. Ask for these, and have your solicitor read them properly.

• The lease length. On a new flat confirm it is a long term, typically 990 or 999 years. On any resale flat, treat anything approaching 90 years or below as a real cost to price in.
• The ground rent. Confirm whether there is any, the exact figure, and any review or doubling clause. A peppercorn is ideal. Anything with an escalation clause needs proper advice.
• The service charge. The last three years of accounts, the current budget by line, and the reserve fund. See the service charge guide.
• Who the freeholder and managing agent are, and whether the building is share of freehold, resident-managed, or run by an outside freeholder.
• Any permission or admin fees in the lease, for subletting, pets, or alterations.

Leasehold is not a reason to avoid a new-build flat. It is simply how flats are owned, the worst of the old practices have been reformed, and more protection is on the way. What matters is a long lease, a low or peppercorn ground rent, a well-run building, and a solicitor who has read the lease closely. Get those right and the leasehold label is just paperwork.

Once you are happy with the lease itself, the same care applies to the wider deal. See the other things to confirm before you make an offer in Battersea.

Sources

• GOV.UK, Leasehold property (freehold and leasehold defined).
• GOV.UK, Leasehold Reform (Ground Rent) Act 2022 guidance (peppercorn rule from 30 June 2022, ban on admin fees, £30,000 fines, and the earlier spiralling ground rent problem).
• The Leasehold Advisory Service (LEASE), Marriage value (the 80-year threshold and 50/50 split) and Lease extension reforms (990-year term and abolition of marriage value).
• Leasehold and Freehold Reform Act 2024 (the primary legislation).
• House of Commons Library, Leasehold reform in England and Wales: what’s happening and when? (what is in force and what awaits secondary legislation).
• HomeOwners Alliance, Leasehold reform latest (2026 status, the February 2025 and March 2025 changes, and the draft bill).
• GOV.UK, Draft Commonhold and Leasehold Reform Bill and Moving to commonhold: banning leasehold for new flats (commonhold direction and the proposed ban).