What is a Share of Freehold flat?

You’ve been searching Rightmove and Zoopla for your dream home and have come across the phrase ‘Share of Freehold flat’.

‘What does it mean?’ you ask, and luckily for you, I’m here to finally answer the question which leaves many first time buyers confused yet intrigued.

To understand if a Share of Freehold flat is going to be right for you, it’s important to compare it to the more commonly found ‘Leasehold flat’. In the UK, there are two main types of ownership for flats: leasehold and share of freehold.

A leasehold flat means that the owner of the flat only owns the right to occupy the property for a set period of time, typically between 99 and 125 years (the length of the lease). The freehold of the property is owned by the landlord or the freeholder, who is responsible for the maintenance and repair of the building, as well as insuring the building. The leaseholder typically pays an annual ground rent and a service charge to cover the costs of maintaining and repairing the building.

On the other hand, a ‘share of freehold’ flat means that the owner of the flat owns a share of the freehold of the building in addition to their individual flat. This means that the flat owner has a say in the management and maintenance of the building and has a greater degree of control over the upkeep of the property. Share of freehold properties are typically managed by a residents’ association or management company made up of the flat owners, who are responsible for maintaining the building and communal areas.

There are several advantages and disadvantages to both types of ownership. For leasehold flats, the advantage is that the initial cost of purchasing the property is generally lower compared to a share of freehold flat. However, the leasehold flat owner has less control over the maintenance and management of the building, and may be subject to increasing ground rent and service charges.

For share of freehold flats, the advantage is that the flat owner has more control over the management and maintenance of the building. However, the initial cost of purchasing a share of freehold property is generally higher, and the flat owner is responsible for contributing to the cost of any major works or repairs to the building. There may also be restrictions as to which lenders will mortgage a share of freehold flat, compared to a standard leasehold flat.

It is important for potential buyers to carefully consider the advantages and disadvantages of both types of ownership, as well as any associated costs, before making a decision on which type of property to purchase. If you’re considering purchasing a flat that is a Share of Freehold I suggest you discuss it with your mortgage broker so that they can help to check eligibility from a mortgage perspective and give you the best advice possible.