What Is Share of Freehold

Understanding the Basics of Property Ownership

In the UK, residential properties are typically owned as either freehold or leasehold. With freehold, you own the property and the land it sits on outright. This is the most common arrangement for houses. Leasehold, on the other hand, is most often applied to flats. As a leaseholder, you own the property for a set number of years but not the building or the land it stands on. Instead, those are owned by a separate freeholder, and the lease outlines your rights and responsibilities during your period of ownership.

What Does Share of Freehold Actually Mean?

A share of freehold is a form of hybrid ownership. If you purchase a flat with a share of the freehold, you still own the flat on a leasehold basis, just like any other leasehold property. However, you also jointly own the freehold of the entire building, usually alongside the other flat owners. This shared ownership might be held through a limited company formed by the residents, or it might be in your personal names, depending on how the freehold has been structured.

How This Works in Daily Life

As a part-owner of the freehold, you’ll be jointly responsible for the management and upkeep of the building. This includes things like maintenance decisions, building insurance and setting service charges. Many buildings appoint a managing agent to handle the day-to-day administration, but the ultimate responsibility remains with the freeholders that is, you and your fellow flat owners. This arrangement provides more control over the building and its running, which can be appealing to those who prefer a more hands-on approach.

The Role of the Lease Still Matters

Although you own part of the freehold, your flat is still owned on a leasehold basis. The lease remains an important legal document and defines your rights as an individual owner. The key difference is that, as a co-freeholder, you and your neighbours have the power to extend your leases, modify certain terms, and generally have more flexibility—without needing to pay a premium to a third-party freeholder. This added control is one of the main reasons buyers seek out share of freehold properties.

Advantages of Shared Freehold Ownership

One of the biggest draws of share of freehold is the increased sense of control and long-term security. You are no longer at the mercy of a distant landlord when it comes to extending leases, authorising building works or setting service charges. Instead, decisions are made collectively by the flat owners themselves. This can lead to more transparent costs and better management of the property, particularly if the owners are proactive and cooperative.

Challenges to Be Aware Of

While there are many benefits, shared freehold also brings a level of responsibility. As a co-owner of the building’s freehold, you’ll be involved in decision-making and possibly the legal obligations of running a freehold company. This includes things like ensuring buildings insurance is in place, managing financial records, and maintaining the property to a reasonable standard. In buildings with only a few flats, disagreements between owners can occasionally lead to difficulties in making decisions or arranging essential work.

A Sensible Option for Long-Term Flat Ownership

A share of freehold offers a practical and often rewarding way to own a flat. It allows for greater control over your property and usually reduces long-term costs associated with lease extensions and freeholder charges. However, it does come with shared responsibilities, and good communication between co-owners is essential. With a solid lease in place and a clear understanding of how the freehold is structured, share of freehold can be a secure and attractive choice for many flat buyers.