What to Consider Before Buying a Leasehold Flat in Central London
By Courtney Manton | Created on 4th August 2025
When purchasing a new property, one factor to consider is whether the property is leasehold or freehold. Most flats in central London are leasehold, so if you buy a flat in areas such as Belgravia, Mayfair or Westminster, there is a good chance the property will be leasehold.
Whether the property is freehold or leasehold will affect your rights and responsibilities. For example, with a leasehold, you may have to pay service charges and other costs.
Therefore, it is a good idea to find out all the information you need before you put in an offer for the property. The estate agent should be able to provide you with most of the information about the lease.
What Does Leasehold Property Mean?
If you buy a leasehold property, you do not own the land or building, and you have a lease agreement with the landowner (freeholder). The most common type of leasehold property is flats or apartments, where the freeholder owns the building.
When buying the flat, you enter a lease period, and under the lease terms you will pay ground rent to the freeholder.
If you buy a freehold property, you will own it outright, including the land on which it is built. Most houses in the UK are freehold but some are leasehold, including properties bought through shared ownership schemes.
Advantages and Disadvantages of Leasehold
There are advantages and disadvantages to buying a home that is leasehold:
Advantages:
Affordability – Leasehold properties are often more affordable than freehold.
Maintenance and repair costs – There is less responsibility for repairs, as common areas are usually the freeholder’s responsibility.
Desirable locations – Leasehold properties are often located in desirable areas, such as central London, with easy access to the city.
Amenities and services – Many leasehold properties offer gyms and communal gardens.
Disadvantages:
Ground rent – You will usually have to pay annual ground rent to the freeholder.
Service charges – There may be service charges such as communal maintenance.
Length of the lease – As the length of the lease reduces, you may need to renew the lease and a short lease length can reduce the property value.
Selling – Selling leasehold property can be more challenging, but this is not usually a problem, especially in desirable locations.
Why Would Anyone Buy a Leasehold Property?
Despite the potential pitfalls, people choose to buy leasehold properties for their lower selling prices and often excellent, central locations. With a higher than average percentage of leasehold properties in prime central London, it’s often practical to buy a leasehold apartment if you want to live in desirable areas such as Mayfair and Belgravia.
Future Changes Under the Leasehold and Freehold Reform Bill
Following the Leasehold Reform (Ground Rent) Act 2022’s revision of the rules on ground rent, the new Leasehold and Freehold Reform Act 2024 introduced further updates for leaseholders. However, the bill was passed hastily ‘in the wash’ prior to the 2024 election, leading Labour to set a staggered roll-out. Revised right to manage provisions and the removal of the 2-year wait before buying the freehold of a leasehold house have already been implemented. Other measures, like action on service charges, remain in the works.
Questions to Ask When Buying a Leasehold Flat
Whether the property is freehold or leasehold could significantly impact the costs you have to pay and the rights you have for having work completed.
Read on for the most important questions to ask when buying a leasehold property in central London.
1. How Long Is Left On The Lease?
When you buy a leasehold home, you must determine how many years remain on the lease. The lease term is important because it can be tough to get a mortgage on a property with a short lease, and the cost of extending the lease can increase considerably if the term drops below 80 years.
When you buy a leasehold apartment, you purchase the right to possess the property for the remainder of the lease period. When first drawn up, leases can run from anything between 99 and 999 years. As time goes on, the lease period reduces. When the leasehold term reaches zero years, the property ownership reverts to the freeholder.
The value of properties with short leases rapidly decreases. A residential lease with less than 80 years left constitutes a short lease. Mortgage lenders tend to require at least 90 years left on the lease, so that there is time to extend the lease.
2. Can I Extend The Lease?
If you are considering a leasehold property with less than 99 years remaining on the lease, consider extending it.
Currently, leaseholders have a legal right to extend their lease only after two years of living in the property. You can ask the seller to start the formal process to extend your lease and continue it yourself after purchasing the property.
The costs of extending a lease are high and comprise the premium payable to the freeholder, legal expenses and taxes. If the lease has less than 80 years to run, the price is even higher as the leaseholder must pay the ‘marriage value’. The marriage value is the increase in the value of the apartment resulting from the lease extension.
New government reforms are in motion, but they still need to become law to make extending leases easier and cheaper for leaseholders. The proposals include:
Giving leaseholders the right to extend their lease to 990 years with zero ground rent.
Setting calculation rates for extending a lease to ensure prices are fairer, cheaper and more transparent.
Abolishing prohibitive costs like ‘marriage value’.
Typically, buying a share of freehold must be done through a collective group. For example, if four flat owners are in the building and want to buy a share of the freehold, they could each purchase 25% of the freehold.
The option to buy the freehold could be important in the future, so it is recommended to check whether the option for buying the freehold is set out in the lease.
4. How Much Is The Ground Rent And Will It Change?
Ground rent is traditionally a token fee paid to the freeholder in exchange for renting the land the property sits on. If you are required to pay ground rent, the lease will detail this.
Ground rent can increase over time, for instance, rising every ten years in line with the Retail Price Index (RPI). Increases in ground rent must be specified in the leasehold document, so make sure you look at this carefully. However, this should be limited to a ‘peppercorn rent’ according to new legislation gov.uk.
5. How Much Is The Service Charge, And What Is Included?
Most leaseholders will pay service charges to the freeholder or company responsible for managing the property. This covers all the activities needed to maintain the building, including building insurance, maintenance and repairs, provision of leisure facilities, concierge services, or additional security.
The service charge could be between a few hundred pounds and thousands of pounds per year for luxury apartment blocks. Ensure you understand when and how to pay the service charge and precisely what it covers.
6. What Restrictions And Consents Are There In The Lease?
Make sure you find any restrictions or consents stipulated in the lease. For instance, pets may not be allowed, or you may need permission to undertake home improvements or to run a business from your property.
7. Are There Any Administration Charges?
There may be administration charges that the freeholder charges to the leaseholder for admin work they are required to do. This includes admin, such as providing a document, answering a query, granting an approval or dealing with late payments for ground rent. Check whether these charges apply and how much the freeholder charges for administration tasks.
8. Have Any Alterations Been Made To The Property?
Determine if the seller or any previous owners have altered the property and ensure proper consent exists. Otherwise, you could be forced to pay the costs of obtaining the property consent from the freeholder.
9. What Are The Property Boundaries?
With leasehold apartments or flats, property boundaries are more complicated than houses, where the whole property is contained within the boundary. The ‘demised premises’ refers to what is included in the ownership, such as the flat’s interior. Structural and external walls or roofs will not usually be included in the property boundaries for a flat.
10. Is There A Sinking Fund?
Check that part of the service charge goes into a reserve or sinking fund. Sinking funds are helpful because they cover the cost of expensive maintenance work, such as replacing the roof or re-decorating the exterior and communal areas.
11. Is Any Major Work Scheduled?
Find out if any significant work is planned and whether the sinking fund already covers the costs. Otherwise, you may become liable as the leaseholders share the costs. You would add a premium to your service charge.
12. Who Is The Management Company?
Find out as much as you can about the management company, because it is their job to ensure the property, facilities, and communal areas are in good repair. Try to find out their reputation by internet searches or by asking other residents in the building.
13. How Many Of The Leaseholders Are In Arrears?
If many leaseholders are in arrears, the standards of service you receive may deteriorate. You should also check any arrears owed by your seller, since they will become your responsibility following completion.
14. What About Buildings Insurance?
Leaseholders will usually be required to pay a share of the building’s insurance. That’s because the freeholder typically arranges the building’s insurance and divides the cost between the flat owners. This may be included in the service charges, but you should check whether this is true.
How Much Does It Cost to Buy A Leasehold Compared To Freehold?
Leasehold properties can be just 75% of the price of equivalent freeholds. Those with a shorter lease can be cheaper still, but think long term there can be disadvantages to buying a leasehold property at this point, namely the potential costs and challenges of lease extensions.
Average Solicitor’s Fees For Buying a Leasehold Property
The average legal fees are higher due to the additional stages of buying a leasehold flat, and the details they need to inspect. For example, your solicitor will check over the Deed of Covenant and the leasehold management information pack, and review any maintenance fees, service charges, ground rent and rent review clauses.
Find Out More
For free legal advice on leasehold properties, contact the Leasehold Advisory Service, which provides government-funded, independent advice for residential leaseholders.
Do you have any questions about the topic above? Our team of experts is here to help in answering any query you may have.
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Courtney Manton
Courtney is a Chartered Surveyor, the senior partner and owner of the Best Gapp group.
His special talent honed over the last 30 years is winning. Winning for his many clients.
Winning a Leasehold Enfranchisement case, winning a negotiation to sell or buy, winning a lower rent at review, winning a planning permission to enhance value, winning trust.
