We explain Share of Freehold and Leasehold
If you’re in the process of buying a flat or apartment, you may have encountered the term “share of freehold” during your property search. But what exactly does it mean, and how does it differ from leasehold or freehold ownership? In this blog post, we explain what share of freehold means and what it entails for property owners.
We also outline common advantages, practical pitfalls (decision‑making and costs), and how lenders and buyers typically view share of freehold arrangements. For further information on Share of Freehold, please refer to our blogs which provide in depth explanations of the process for both, purchase and sale of Share of Freehold properties.
If you are buying for selling property you will need to know legal costs. try our instant online conveyancing calculator.
First, let’s start with definitions of freehold and leasehold.
Share of Freehold vs Leasehold
Freehold
A freehold property refers to a type of property ownership where the owner has complete and indefinite ownership of both the property itself and the land on which it stands. This means there is no time limit on the ownership, and the owner is fully responsible for the maintenance of the property and land. In a block of flats there is usually a single freehold for the whole building and common parts.
Leasehold
A leasehold property is a type of property ownership where the buyer owns a leasehold interest in the property (such as a flat or apartment) for a fixed period under a lease agreement, but not the land it is built on. The land and building are owned by a freeholder (or landlord), and the leaseholder essentially rents the property for the duration of the lease, which can range from a few years to several decades or even centuries.
The leaseholder typically pays annual ground rent, service charges, and maintenance fees to the freeholder or management company for the upkeep of communal areas and the building. Ground rent is not payable in all cases and, for most new regulated long residential leases granted since 30 June 2022, monetary ground rent is restricted to a peppercorn ground rent (subject to statutory exceptions). At the end of the lease term, ownership of the property reverts to the freeholder unless the lease is extended. Leaseholders usually require permission from the freeholder for significant changes to the property, such as renovations, depending on the wording of the lease (for example, whether alterations are permitted with consent or prohibited). A share of freehold is essentially a combination of these two types of property ownership. You still own your flat on a lease, but you also share ownership (directly or via a company) of the freehold that controls the building.
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What is Share of Freehold?
Share of freehold is a type of property ownership applicable to flats and apartments in the UK. Property owners own their leasehold property plus a share of the freehold in the building. This arrangement grants them greater control over the management and maintenance of the building, as well as the ability to extend their leases (by agreement) and influence building management decisions (subject to planning permission and building regulations). It does not remove the need for a lease—each flat still has (and needs) its own lease setting out rights and obligations. Lenders and buyers will expect those leases to be well‑drafted and consistent across the block (e.g., service‑charge machinery, repair, insurance and enforcement provisions).
How is a Share of the Freehold Set Up?
There are two main ways a share of the freehold can be structured:
- The Freehold is Split Between Flat Owners: Two or more flat owners can own the freehold in their personal names. These owners act as trustees, and a declaration of trust deed may be necessary to prevent future conflicts over contributions made to the property and to set out decision‑making (e.g., unanimity/majority), cost‑sharing and dispute processes.
- A Company Owns the Freehold and Flat Owners Buy a Share: In this scenario, residents buy a share in the company that owns the freehold, or they receive their share through the property’s title deeds. This is the more common setup. Company ownership allows changes in flat ownership without re‑transferring the freehold and provides clearer governance (articles of association, directors’ duties). A managing agent can be appointed to deal with day‑to‑day matters, but ultimate control rests with the freehold company/directors.
Practical note: Share of freehold can arise through purchase of a freehold from the landlord (collective enfranchisement), through Right to Manage (management only, not ownership), or because the original developer sold the freehold to the leases/nominee company at the outset. Each route has different procedures, costs and documentation.
Why have Share of Freehold Properties been established?
Share of Freehold properties have been established to ensure the quality of communal spaces and the overall maintenance of the building. When each flat in a block is a freehold property, it can be difficult to manage communal responsibilities. A share in the freehold grants those who accept more responsibility several benefits, including more control over maintenance and potentially lower costs. Other benefits often include: aligning lease terms across the block; greater transparency on service‑charge budgets; and the ability (subject to agreement) to grant long lease extensions at nominal or no premium. However, share of freehold also carries responsibilities: owners must agree budgets, place buildings insurance, comply with health and safety/fire safety obligations, and enforce lease covenants fairly and consistently. Disagreements or absent co‑freeholders can delay decisions and repairs.
We take an in-depth look at Share of Freehold in our blogs on Share of Freehold.
Share of Freehold vs Leasehold: What’s the difference?
The freeholder is responsible for arranging maintenance and building’s insurance for the building’s exterior and common areas (such as staircases and corridors). In most cases, leaseholders contribute to these costs through the service charge. In contrast, share of freehold means that the freehold is collectively owned by the leaseholders, who each also own their leasehold property. This gives them more control over the management and maintenance of the property, as well as the ability to extend their leases and agree variations to lease terms. Crucially, extending a lease under share of freehold still requires proper documentation (either a deed of variation or, more commonly, a deed of surrender and regrant/replacement lease) and lender consent where the flat is mortgaged. Lease extensions are not automatic simply because the flat owner holds a share of the freehold. Leaseholders constitute a significant portion of the England and Wales’ homeowners due to the fact that leasehold properties often present a more affordable option compared to freehold properties.
We take an in depth look at Leasehold Property in our blogs on Leasehold Property.
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The Importance of Instructing a Specialist Leasehold Solicitor
If you are buying or selling a leasehold property, it’s important to talk to a solicitor who specialises in this type of property.
Leasehold law can challenge even experienced property solicitors. It’s essential to instruct a solicitor with extensive leasehold property knowledge to avoid costly mistakes and we can help. Starck Uberoi offers high-standard leasehold services, including:
- Leasehold purchases and sales
- Lease Extensions
- Leasehold disputes
You may want to try our lease extension calculator.
We have Law Society Accreditation under the Conveyancing Quality Scheme (CQS) in recognition of the excellent standard of conveyancing service we offer. We take a client focused approach dedicated to making the conveyancing process as quick and easy as possible, clients have access to the Starck Uberoi app and we offer a comprehensive and convenient no obligation online conveyancing quote.
We are also trusted conveyancers on the lender panels for the majority of high street lenders including Barclays, Halifax, HSBC, Nationwide, NatWest and Santander.
We go above and beyond to provide a comprehensive service to all clients, with jargon free advice and an individualised approach to each matter. For share‑of‑freehold blocks, we can review and modernise leases, structure and incorporate the freehold company, prepare director/shareholder governance, arrange compliant lease extensions and variations, and coordinate buildings insurance and major‑works planning with managing agents.
To book an appointment, please call 020 8840 6640 or email solicitor@starckuberoi.co.uk.
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We are proud to be Members of the Association of Leasehold Enfranchisement Practitioners (ALEP). ALEP Members are vetted to ensure that they have the requisite expertise in leasehold enfranchisement. ALEP acts as a badge of assurance and confirms that we can handle potentially complex collective enfranchisement transactions.
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