What is a freehold?
(Last Updated: 25/10/2024)
31/10/2022
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5 min read
The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published. Read more - Expected changes
There are 2 types of property tenure:
- Freehold
- Leasehold
What is a freehold?
A freehold is defined legally as ‘permanent and absolute tenure of land or property with freedom to dispose of it at will’. In everyday terms regarding dwellings, it means you own the building/s and the land on which it is built on, as long as you are buying an absolute title (read on to find out more about this).
Is a Share of Freehold a Freehold?
Many buyers assume a share of freehold is a freehold however this is incorrect. A share of freehold is a leasehold property that comes with a share of the freehold title. Click here to read more about buying a share of freehold.
When buying a freehold property in England and Wales your name appears on the Land Registry as the ‘freeholder’ and, in most cases, you own the ‘title absolute’ in perpetuity (although you are still liable to redeem any mortgage you have taken out to pay for the property).
The vast majority of houses sold are freehold, but in the advent of shared ownership has seen growth in leasehold houses.
In this article we'll run through:
- What is an absolute freehold title?
- What is a possessory freehold title?
- What are the Pros and Cons of a freehold?
- Are all houses freehold?
- What types of property are freehold?
If you are buying a freehold house and need legal support then call us on 0333 344 3234 (local call charges apply). Our solicitors can handle any type of freehold, leasehold or share of freehold regardless of complexity.
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Can you convert a freehold house into a leasehold?
Yes you can, and many London Victorian freehold houses get converted into 2 or 3 leasehold flats. You may find this style of leasehold flat also comes with a share of the freehold.
What are the different grades of Freehold Title?
Although in the majority of cases, a freehold title will be held absolute, there are a few cases where only a possessory title is granted by the Land Registry, and even fewer are a qualified title.
What is an Absolute Title?
An absolute title is granted when the buyer has a sound title, with the title deed in order and there is no one else could lay claim to the title (lay claim, meaning someone else can prove they own the title). If you have an absolute title registered at the Land Registry then this confirms that they "guarantee that you own the land" (the freehold). Read more - What is an Absolute Title?
Even with an absolute title, the freeholder is still subject to:
- overriding interests;
- minor interests protected by entry on the register; and
- if the registered freeholder is a trustee, equitable interests under the trust of which the trustee has notice.
What is a Possessory Title?
A possessory title is registered where there is, or could be, a debate over the claim the freeholder has over the freehold title. This most commonly occurs where the title deeds produced are inadequate, or if the freeholder cannot produce any title deeds at all. It could also be the case that the freeholder confirms that the land was not originally theirs, but they are making claim that they now own it under 'adverse possession'. Read more - What is a Possessory Title?
What is the Adverse Possession rule?
The adverse possession rule means that if some one has been in control of a piece of land for 12 years, then all rival claims are normally made void due to the lapse of time.
A possessory title doesn't offer a great deal of comfort to a buyer as it is merely acknowledging that they are in control of the land at that time - it doesn't guarantee that they are the owner of the land. This means that is someone within the next 12 years is able to prove a better claim to the land, then they can remove your as the owner and replace themselves as the owner of the title absolute. You are unlikely to be able to register a mortgage over a possessory title. Read more - Protection with Possessory Title Indemnity Insurance.
The pros of buying a freehold property
- You never have to pay ground rent;
- You don’t have to pay a freeholder or managing agent to maintain your property;
- You own your building in perpetuity; ownership never reverts to anyone else (unless you have a Possessory Title and someone comes along with a better claim to the freehold than you);
- You can make alterations/extensions without consent from a freeholder
- You have the possibility of converting the property into leasehold flats.
The cons of buying a freehold property
- Freehold properties are more expensive to buy;
- You have to manage the maintenance of your property yourself.
- You could be buying a 'flying freehold'.
Frequently Asked Questions
LEASEHOLD
COMMONHOLD
TENURE
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Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
