What share of freehold actually means
In a typical flat, you buy the leasehold, the right to live there for a fixed number of years, while a separate freeholder owns the building and land. With share of freehold, the flat owners collectively own that freehold too, so you are both a leaseholder of your flat and a part-owner of the wider building.
This usually happens in one of two ways. Either a limited company owns the freehold and each flat owner is a shareholder/director, or the freehold is held directly by up to four named individuals (the legal maximum for joint legal ownership of property). The company route is common in larger blocks because it can include more than four flats neatly.
Crucially, you still have a lease underneath the freehold share. The lease governs your individual flat, while the freehold ownership gives you a say in the building as a whole.
Leasehold vs share of freehold vs freehold
How share of freehold sits between the two main forms of ownership.
| Feature | Leasehold | Share of freehold | Freehold |
|---|---|---|---|
| You own the building? | No | Jointly with others | Yes (whole property) |
| Ground rent | Often payable | Usually none (or nominal) | None |
| Control of service charges | Limited | Shared control | Full |
| Lease extension | Costly, via freeholder | Easy and cheap, often to 999 years | N/A |
| Typical property type | Flats | Flats (small blocks) | Houses |
Share of freehold mainly applies to flats; houses are usually straightforward freehold.
Advantages of share of freehold
Why buyers value it:
- Control over service charges, maintenance and choice of contractors.
- Ability to extend your lease easily and cheaply, often to 999 years.
- Usually no ground rent payable to an external freeholder.
- A direct say in how the building is run and how problems are fixed.
- Potentially better resale appeal than a standard leasehold flat.
Things to check before buying
Share of freehold is not automatically problem-free, your conveyancer should confirm:
- The length and terms of your underlying lease (extend it if it is short).
- How the freehold is held, through a company or by named individuals.
- Whether the freehold company is properly run, with up-to-date accounts and Companies House filings.
- What happens to the freehold share when you sell (it should transfer with the flat).
- Whether all flats participate, and how decisions and costs are shared.
- Whether buildings insurance and a maintenance fund are in place.
Co-operation is the catch
Because you share ownership and responsibility with your neighbours, major works and big decisions need agreement. If owners disagree or some refuse to contribute, maintenance can stall and disputes can arise. Ask how decisions have been made historically and whether relations between owners are good.
Lease extensions and selling
One of the biggest practical benefits is lease extension. As a part-owner of the freehold, you and the other owners can grant yourselves a new, long lease, frequently 999 years, at little cost beyond legal fees, because there is no external freeholder to pay a premium to. This removes the 'short lease' problem that can blight ordinary leasehold flats.
When you sell, your freehold share transfers with the flat, so the buyer steps into your position. Make sure the legal structure is clean and the freehold company's paperwork is in order, because buyers' solicitors will scrutinise it, disorganised freehold management is a common cause of delays in share-of-freehold sales.