Estimate annual leasehold costs — service charge, ground rent and management fees — and see the true long-term cost of a leasehold property.
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How This Works
Annual leasehold costs = service charge + ground rent + management fee. These increase over time — typically linked to RPI or a fixed percentage. Over a 25-year mortgage, even a modest £2,400/year service charge growing at 3.5% totals approximately £85,000. Ground rent reforms (Leasehold Reform Act 2022) have capped ground rent for new leases at a "peppercorn" (effectively zero).
Freehold: you own the property and the land it stands on outright, forever. Leasehold: you own the right to live in the property for the remaining term of the lease (typically 99–999 years when granted). As the lease term falls below 80 years, the property becomes harder to mortgage and sell, and extending the lease becomes very expensive. Always check the lease length before buying. For flats, leasehold is standard in England and Wales — but the government has been reforming leasehold law significantly since 2022.