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The History of Freehold and Leasehold in the UK (and Why It's Finally Changing, Slowly)

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Buy a flat in England or Wales and there is a good chance you do not actually own it. Not the land it sits on, anyway, and often not the building it is part of. You own the right to live there for a fixed number of years, after which, in theory, the whole thing reverts to someone else. That someone is the freeholder, and the arrangement you have signed up to has roots that run back almost a thousand years.

Around 5 million homes in England and Wales are held this way. For decades it was treated as just how property works. That assumption is now collapsing. The government has called leasehold a "feudal" system and set out to end it. To understand why, it helps to know how we got here.

Freehold and leasehold: the quick version

A freehold is the closest thing to outright ownership of property in England and Wales. You own the building and the land beneath it, with no time limit and no landlord.

A leasehold is ownership with an expiry date. You own the right to occupy a property for a set term, often 99, 125 or 999 years when first granted, under a contract with the freeholder. You usually pay ground rent and service charges, and the freeholder keeps ultimate control of the building and the land. When the lease runs down, your asset shrinks. Below roughly 80 years remaining, extending it gets sharply more expensive.

Most flats in England and Wales are leasehold. Many newer houses were sold that way too. The reason traces back to the Middle Ages.

A system born in the Middle Ages

After 1066, William the Conqueror established a principle that has never fully gone away: all land in England ultimately belongs to the Crown. Everyone else holds it from someone above them. The Domesday Book of 1086 recorded who held what, and the word "freeholder" appears in it, describing those who held land permanently and could pass it on.

Below the freeholders sat a long chain of lesser tenants. Lords granted land to others in exchange for military service, rent or labour, and those tenants granted it on again, a practice called subinfeudation. The pyramid grew so tangled that the statute of Quia Emptores put a stop to it in 1290. Meanwhile a separate idea was taking shape: letting someone work a plot of land for a fixed period in return for payment. That was the seed of the modern lease.

Leasehold really came into its own much later. In the Georgian and Victorian eras, the great London estates, names like Grosvenor, Cadogan and Howard de Walden, developed huge swathes of the capital using building leases. A developer would build houses on the landowner's land, sell long leases to occupiers, and the land itself would eventually return to the estate. It was a tidy way to profit from land without ever giving it up. Some of those same family estates are still freeholders today, and, as we will see, still fighting to protect the model.

How leasehold took over the modern market

Two developments cemented leasehold in the twentieth century.

First, the Law of Property Act 1925 swept away the old jumble of land tenures and reduced legal ownership to two estates: the freehold (the "fee simple absolute in possession") and the leasehold (the "term of years absolute"). The two-tier system we live with today was set in stone.

Second, the post-war boom in flats. Freehold does not work cleanly for a block of flats, because you cannot easily own a slice of airspace on the third floor with no land boundary on a map. Someone has to own and maintain the shared structure, the roof, the hallways, the foundations. Leasehold became the default answer (which is not the case almost everywhere else in the world!). As flat-building accelerated from the 1950s onwards, so did leasehold ownership. The system designed for serfs working a medieval field ended up governing millions of modern homes.

The slow drip of reform

Leaseholders have been pushing back for over half a century, and Parliament has handed them rights in stages:

  • Leasehold Reform Act 1967 gave leaseholders of houses the right to buy their freehold or extend their lease.
  • Leasehold Reform, Housing and Urban Development Act 1993 extended similar rights to flat owners: collective enfranchisement (buying the freehold of the whole building together) and individual lease extensions.
  • Commonhold and Leasehold Reform Act 2002 did two things. It created the Right to Manage, letting leaseholders take over the management of their building without having to buy the freehold or prove any fault. And it introduced commonhold, a way to own a flat outright while collectively owning and running the shared parts, with no freeholder and no expiry date.

Commonhold was meant to be the future. Instead it was barely used. In more than two decades, only a tiny number of commonhold developments were ever built. Developers had no incentive to give up the income that freehold ownership and ground rents provided, and the legal framework was clunky. Leasehold rolled on.

The scandal that changed everything

The turning point was not a piece of legislation. It was a scandal.

Around 2017, it emerged that major housebuilders had been selling new houses, not just flats, as leasehold, with ground rents written to double every ten years. A charge that started at £100 a year would reach £1,600 within forty years. Buyers were often not told clearly what they had agreed to. Developers then sold the freeholds on to investment funds, which had little interest in softening the terms. The clauses made homes hard to sell and, in many cases, impossible to mortgage. People found themselves trapped in properties they could not offload.

The press dubbed it "fleecehold." The government banned the sale of new leasehold houses and, in 2019, the Competition and Markets Authority opened a formal investigation into mis-selling and unfair terms. The CMA secured agreements from developers including Taylor Wimpey and Countryside to strip out doubling clauses and refund affected owners, with more than 20,000 leaseholders benefiting. Taylor Wimpey alone set aside £130 million.

The scandal did something campaigning groups had struggled to do for years: it made leasehold a national political issue. The case that the whole model was rigged in favour of freeholders suddenly looked obvious.

Why leasehold is changing now

What followed is the most serious attempt to dismantle leasehold in its history, and it is happening right now.

The Leasehold Reform (Ground Rent) Act 2022 banned ground rents on most new long residential leases, reducing them to a "peppercorn," meaning effectively zero. New leaseholders stopped being a source of pure ground rent income.

The Leasehold and Freehold Reform Act 2024 went much further. Passed in the rush before the 2024 general election, it bans new leasehold houses, removes the old rule that you had to own a property for two years before extending the lease or buying the freehold (in force since early 2025), introduces 990-year lease extensions, makes the Right to Manage available to more buildings, tightens the rules on service charges, and abolishes "marriage value," the extra premium that made extending a short lease so painful. Many of its biggest provisions are not yet switched on, however. They depend on further regulations, and on fixing some drafting errors in the Act through new legislation.

They also depend on the courts. A group of major freeholders, including some of the historic London estates, challenged the Act, arguing that abolishing marriage value and capping their income breached their human rights. In October 2025 the High Court dismissed the challenge in full, ruling that Parliament was entitled to rebalance the system in favour of leaseholders. The freeholders have been given permission to appeal, and that appeal is expected to be heard around late 2026 or 2027, so the final shape of the rules is still being contested.

The boldest move is yet to come. In March 2025 the government published a Commonhold White Paper, describing it as "the beginning of the end" for the feudal leasehold system. A draft Commonhold and Leasehold Reform Bill followed in January 2026 and is now going through pre-legislative scrutiny, with a final Bill expected later in 2026. The plan is to revive commonhold, make it the default way to own a flat, and ban the sale of new leasehold flats, potentially from 2029. A separate consultation has looked at how to let existing leaseholders convert to commonhold, and the government has signalled it intends to tackle the ground rents that existing leaseholders still pay.

The striking thing is the consensus. Leasehold reform now has support across the main parties. The argument is no longer whether the feudal model should end, but how fast and on what terms.

What this means if you own a leasehold home today

Reform is real, but it is slow, partial and tied up in court. The 990-year extensions and the cheaper enfranchisement rules are not all in force yet, and the move to commonhold is years away. If you are a leaseholder waiting for the system to fix itself, you could be waiting a long time.

The good news is that one of the most powerful rights already exists and does not depend on any of the pending changes: the Right to Manage. You do not need to buy the freehold, and you do not need to prove your managing agent has done anything wrong. If your building qualifies, you and your neighbours can take over how it is run, choose your own suppliers, and stop overpaying on service charges.

That is the whole idea behind Free The Flat. Take control of your building, run the block on your terms, and save thousands. The history of leasehold is nine centuries of other people owning your home. The next chapter can be different, and you do not have to wait for Parliament to start writing it.

You can check whether your building is eligible for Right to Manage in a couple of minutes. Check your building's eligibility.

Sources and further reading

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