What does freehold tenure mean?
What does freehold tenure mean?
If you’re googling “tenure freehold meaning”, then chances are you’re making your first foray into the housing market — so congratulations! Setting out to buy your first property is an enormously exciting journey and, as you’ve likely already noticed, there are a couple of different options on offer. But freehold tenure, leasehold, share of freehold… What’s the difference exactly?
If you’re feeling confused by property adverts or ownership agreements using these terms, you’re not alone. In this article, we’ll answer “what does tenure freehold mean”, while giving you a general overview of the difference between freeholds, leaseholds, and everything in between. Ready? Let’s get into it…
What is tenure?
So before we go any further, let’s start with “tenure” and what exactly that means. You might have heard this term before because it’s used in a few different contexts. In business or politics, a “tenure” is how long someone has held an office or position. For teachers, academics, and scientists, to be awarded “tenure” means to be granted employment for life — for example, you might remember Ross from Friends exclaiming, “I made tenure” after he gets a permanent teaching position at his university. It’s even used in renting, where security of tenure is the right a tenant has to remain at a property after their tenancy agreement has ended.
But what about property ownership? Well, in this context, the type of tenure you have determines what level of ownership you’ve got on the property and how long you’re entitled to stay there. So, in a similar way to how the word is used across other contexts, tenure is largely about security and rights. But what about freehold tenures? Well, keep reading and we’ll get to that next…
Freehold tenure meaning
Okay, so now you’ve got the meaning of tenure down, let’s add another piece to the puzzle. What is freehold tenure and how do tenure and freehold fit together? Well, freehold tenure means you have permanent and absolute ownership of your land or property with the freedom to do with it as you please. So if you want to knock down all the walls or paint the front door gold? That’s totally your call. Tenure freehold also means there’s no point at which your property ownership will expire or be handed over to someone else (unless you choose to sell up). You’ve got that property for life and it can be passed onto a family member or friend in your will.
So, understandably, freeholds aren’t cheap…But they do come with the highest security and rights of ownership. However, it’s worth noting that with ownership comes responsibility — for example, if you’re intending on renting your property out to other people or selling a leasehold, you’ll be responsible for property maintenance and management. That means building features such as driveways and parking spaces will need to be kept clear and in good working order. For apartment buildings, it also means you’ll be responsible for any mess or clean-up required in communal areas.
To learn more about freeholder responsibilities, why not check out: ‘What is a right to manage’. Or, if you’re interested in learning more about the pros and cons of being a freeholder, take a look at: ‘Is it worth buying the freehold of my house’.
What is leasehold tenure?
Next up: leaseholds! So if you’ve been browsing the windows at your local property agent, you might have seen a couple of leasehold tenures advertised. While a leasehold is very different from a freehold, there’s no need to be put off by one. Leaseholds are actually one of the most common ways of owning a flat, maisonette, or apartment in the UK.
But what exactly is a leasehold tenure? Well, to put it in simple terms, a leasehold is temporary ownership of a property. This ownership can span anywhere from 99 to 999 years, depending on when the lease was first created. This time period is sometimes referred to as your leasehold tenure, and once your tenure is up, ownership of the property reverts back to the freeholder.
There are a few ways to avoid this happening — for example, you could apply to extend your lease or you might be able to buy the freehold of your property. Unfortunately, if the freeholder serves you notice to vacate your home, you won’t have a legal right to remain there. That’s why it’s important to apply to extend your lease asap if you’re approaching your expiry date and wish to stay. But you can find out more about that in: ‘What happens when leasehold expires’.
Some other key bits you should know about leaseholds include…
- Leaseholders usually have to pay ground rent to their freeholder or landlord. This could be a small, token amount such as £10 per year or it could be more substantial, for example, £100.
- Leaseholders without a right to manage often have to pay a monthly service charge. This could cover cleaning, repair-work, lift maintenance, gardening, heating of communal areas, a live-in warden, or even a concierge service.
- Owning a leasehold doesn’t guarantee you’ll be able to alter the property to suit your tastes or needs. While some properties will have a few restrictions, others can be pretty rigid on any changes being made. It’s important to check what the situation is with this before buying if you’re hoping to make alterations.
- If you buy a property with multiple leaseholders already living there, for example, a flat in a block of flats, you could ask to buy a share of freehold. This gives you a greater degree of ownership and more flexibility on how long you’ll be allowed to stay at the property.
A few final tips…
As you can probably tell, a freehold tenure comes with far fewer strings attached — but with reforms on the way, leaseholds are becoming more beneficial all the time.
To learn what changes are upcoming for leaseholds, check out: ‘When will leasehold reform become law’.
If you’re on the house hunt, why not read up on: ‘How to negotiate house price discounts’.
Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.