What are the different types of Property Tenures & Ownerships?

1. Freehold: Freehold tenure is where the owner of the property owns it outright, including the land it's built on. Your name is in the land registry as the freeholder and you will own the title absolute. Many houses are freehold and this is usually the best option. However, occasionally houses might be leasehold so it is worth checking with us. 

Pros of Freehold : 

. You own the property outright, so you have no lease that dictates terms of ownership
. You don't have to deal with a freeholder (a landlord) because you are the freeholder!
. You don't have to pay ground rent, service charges or other landlord charges.

Cons of Freehold :

. As a freeholder, you are responsible for maintaining your property and the land yourself which could be costly depending on the size of your plot.

2. Share of Freehold: A share of freehold is pretty much what you would imagine it to be, but there are a couple of different ways in which it can be set up. The first is where the freehold is split jointly between a number of flat owners within the property and the freehold is held in their personal names. This can be done by up to four flat owners.

The second is when a company owns the freehold and each of the tenants holds a share (sometimes referred to as a membership) of said company. So, when you buy a flat with a share of freehold, you will either be given that share by way of having your name on the deeds of the property or you’ll be given a share in the company that is controlling the freehold. Whichever way it is set up the result is ultimately the same – you’ll have a share in the freehold of the property.

3. Leasehold: With a leasehold tenure, you have a long term lease to use the home for a certain number of years. The leaseholder has a contract with the freeholder which sets down the legal responsibilities of both freeholder and leaseholder. Leases can be up to 999 years, however, it is common for many flats to have a starting lease of around 125 years from new. When a lease ends, the ownership returns to the freeholder unless the lease is extended. Leasehold applies to most flats and maisonettes in England and Wales. In Scotland, leasehold properties are less common.


. There is less responsibility with this tenure type because the freeholder has to maintain the common parts of the building which can include entrance area, staircases, lifts, exterior walls, roofs and gardens.


. If you want to make any changes and do any work to your property, you will usually need to seek permission from the freeholder
. You may face other restrictions such as not being able to sublet or not being allowed to own a pet.
. As a lease decreases in length the property value begins to diminish.

Costs of having a leasehold property: There are maintenance fees, annual service charges and a share of insurance costs. There is usually an annual ground rate fee to pay.

4. Commonhold Ownership: Commonhold is a new form of tenure introduced in 2004, it is in actual fact a form of freehold for a property where there are multiple units i.e. flats of separate ownership which also have common areas such as stairways, halls and driveways. This particular tenure is only applicable when there is not a fixed period in terms of ownership and anyone who is not an owner cannot have an interest in the property. This particular tenure is done by the Commonhold association (being a Limited company) whose members are the unit owners.

5. Joint Ownership: You must decide which type of joint ownership you want if you buy, inherit or become a trustee of a property with someone else. You tell HM Land Registry about this when you register the property.

You can own a property as either ‘joint tenants’ or ‘tenants in common’.

The type of ownership affects what you can do with the property if your relationship with a joint owner breaks down, or if one owner dies.

Joint tenants: Joint ownership takes place when two people decide to purchase a property together. The most common situation is when married or unmarried couples buy a home together, but joint ownership may also be when friends or family members choose to jointly purchase a property.  If you hold the property as joint tenants, both of you will own the whole of the property. You will not each have a quantified share in the property and will not be able to leave a share of the property in your will. If you sell your home, the sale proceeds will be split 50:50.

 As joint tenants (sometimes called ‘beneficial joint tenants’):

  • you have equal rights to the whole property.
  • the property automatically goes to the other owners if you die.
  • you cannot pass on your ownership of the property in your will.

 Tenants in common: If the property is owned by two or more people as tenants in common, then each owner will hold a percentage of ownership interest in the property. This type of ownership is abbreviated as "TIC." The percentages don't have to be equal and are determined by how much each owner contributes to the purchase of the property.

As tenants in common:

  • you can own different shares of the property.
  • the property does not automatically go to the other owners if you die.
  • you can pass on your share of the property in your will.

Posted on Tuesday, April 30, 2019