New Build Leasehold vs Freehold: What Buyers Need to Know in 2026

Tenure is one of the most important parts of a new build purchase because it affects what you own, what you pay for and which legal rules continue after completion.

A freehold house and a leasehold apartment can both be brand-new properties from the same developer, but the ownership structure can be very different.

This guide focuses mainly on England and Wales, where leasehold and freehold are central to the home-buying system. Property law differs in Scotland and Northern Ireland, so buyers there should take advice specific to the jurisdiction.

What is freehold?

Freehold ownership generally means you own the property and the land it stands on without a fixed time limit.

For a house, that normally means you are responsible for the structure, roof, garden and other parts of the property within your title.

But freehold does not automatically mean there are no ongoing estate costs. Many modern developments have privately managed roads, landscaping, drainage or open spaces that freehold owners contribute towards through an estate management charge.

Read our new build service charges and estate management fees guide before assuming a freehold home has no communal costs.

What is leasehold?

Leasehold means you own the right to occupy and use the property for the term of the lease rather than owning the freehold indefinitely.

The lease sets out the term, your responsibilities, the landlord or freeholder's responsibilities, service charges, restrictions and rules for the building.

New-build apartments in England and Wales have traditionally been sold on long leases because the building contains shared structures and communal areas that need collective management.

What is the main difference for a buyer?

• Freehold usually gives ownership of the building and land indefinitely.

• Leasehold ownership lasts for the term stated in the lease.

• Leaseholders usually contribute towards shared building costs through service charges.

• Freeholders can still have estate-management charges on modern developments.

• Leaseholders may need consent for certain alterations or uses.

• The legal paperwork for a leasehold purchase is normally more extensive because the lease and management arrangements must be reviewed.

Do new leasehold properties still have ground rent?

For most qualifying new long residential leases in England and Wales granted on or after 30 June 2022, the Leasehold Reform (Ground Rent) Act 2022 restricts ground rent to a peppercorn, effectively zero financial value.

The rules have exceptions, so your conveyancer should confirm the position for the exact lease. The government's current ground rent guidance explains which new leases are covered.

Do not confuse ground rent with service charges. A new lease can have zero financial ground rent and still have substantial service charges for maintaining the building and communal areas.

What is a service charge?

A service charge is money collected to pay for services, maintenance and management required under the lease.

• Cleaning and lighting communal areas.

• Buildings insurance where arranged by the freeholder or management company.

• Lifts and door-entry systems.

• Gardens and shared external areas.

• Repairs to roofs, external walls and communal structures.

• Managing-agent costs.

• Reserve or sinking funds for larger future work.

Ask for the estimated budget before reserving and make sure your conveyancer explains how your share is calculated.

Can a freehold house still have an estate charge?

Yes. A freehold buyer can still be legally required to contribute towards privately managed parts of a development.

That can include landscaping, play areas, private roads, drainage systems or other communal infrastructure.

The distinction matters because an estate charge is not the same thing as leasehold service charge, even though both create recurring ownership costs.

Are new leasehold houses banned?

The Leasehold and Freehold Reform Act 2024 contains provisions intended to ban most new long residential leasehold houses in England and Wales, subject to permitted exceptions.

However, the relevant provisions have required separate commencement. As of late September 2026, legislation.gov.uk still marks parts of the house-ban framework as prospective, meaning buyers should not assume every provision is already operational without checking the current position.

If you are offered a new leasehold house, ask your conveyancer why the property is leasehold, what legal category it falls into and whether the arrangement complies with the current law.

What is happening with new build flats?

The government published a draft Commonhold and Leasehold Reform Bill in 2026 and consulted on making commonhold the default model for new flats by restricting the future sale of new leasehold flats.

Those proposals are important but they should not be confused with rules already fully in force. A buyer in 2026 may still encounter a conventional leasehold new-build apartment.

The government's commonhold and new flats consultation explains the proposed direction of reform.

What is commonhold?

Commonhold is an alternative ownership structure designed for buildings with shared areas. Instead of owning a lease that reduces in length, the homeowner owns a freehold unit and becomes part of a commonhold association responsible for shared parts of the building.

Commonhold has existed for years but has had very limited use. The current reform programme is intended to make it more practical and widespread.

If a development is marketed as commonhold, your conveyancer should explain exactly how the commonhold community statement and association work.

Does lease length still matter on a brand-new flat?

Yes. A new-build lease may be very long, but the exact term should still be checked.

Your conveyancer should confirm the commencement date of the lease, the number of years granted and any lender requirements.

Do not assume that because a lease is new it is automatically identical to leases on neighbouring developments.

Leasehold restrictions to check

• Rules about subletting.

• Restrictions on alterations.

• Rules covering pets.

• Parking and vehicle restrictions.

• Use of balconies or communal areas.

• Satellite dishes and external equipment.

• Short-term letting restrictions.

• Requirements for landlord or management-company consent.

• Fees connected with consents or administration.

A restriction that does not matter today can become important later when you want to rent the property, install equipment or sell.

Who maintains what?

One of the most practical differences between tenure types is responsibility for maintenance.

A freehold house owner normally maintains the building directly, while a leaseholder contributes to communal repair and maintenance according to the lease.

For an apartment, ask how roof repairs, lifts, fire-safety systems, external walls, communal windows and shared utilities are funded.

What about buildings insurance?

A freehold house buyer will usually arrange their own buildings insurance, subject to mortgage requirements.

For many leasehold flats, the building itself is insured through the freeholder or management arrangement and the leaseholder contributes through the service charge. Contents insurance remains separate.

Our new build warranty vs home insurance guide explains why structural warranties and insurance are different forms of protection.

Does tenure affect your mortgage?

It can. Mortgage lenders have criteria around lease length, service charges, ground rent, title restrictions and the overall legal structure.

Give your solicitor and lender the exact tenure information early. Do not rely on the marketing description alone.

If you are arranging finance, see our new build mortgage guide.

Leasehold vs freehold costs to compare

• Purchase price.

• Ground rent where legally applicable.

• Service charge.

• Estate-management charge.

• Buildings insurance arrangements.

• Reserve or sinking-fund contributions.

• Permission and administration fees where permitted.

• Maintenance that you must fund directly.

• Potential future major works.

Comparing only the asking price can hide a large difference in annual ownership costs.

Questions to ask before reserving

• Is the exact property freehold, leasehold or another tenure?

• If leasehold, how long is the lease?

• Is any ground rent payable?

• What is the current estimated service charge?

• Is there a reserve or sinking fund?

• Who manages the building or estate?

• Can charges increase and how are budgets approved?

• What restrictions apply to alterations, pets or letting?

• If freehold, is there still an estate-management charge?

• Are roads, drainage and open spaces privately managed?

• What reforms or transitional rules affect this property?

Which is better: leasehold or freehold?

There is no useful answer without considering the property type and legal documents. A freehold house can still have significant estate-management obligations, while a well-structured leasehold apartment can provide a clear framework for maintaining shared parts of the building.

The important question is whether you understand the tenure, costs and restrictions before becoming legally committed.

The bottom line

Tenure should be checked as early as the price and mortgage. Freehold and leasehold create different ownership rights, but neither label tells you the full cost of the property on its own.

Ask for the tenure and management information before reservation, then have an independent conveyancer review the exact legal documents before exchange.

For the wider ownership-cost picture, combine this guide with our new build council tax guide and service charges and estate management fees guide.