The 25-year cost of a leasehold

Nobody buys a flat because of the tenure. You buy it for the light, the location, the second bedroom you couldn't afford as a house. The tenure is the small print — the box on the memorandum of sale that says leasehold rather than freehold — and it is almost always waved through as a formality.

It isn't a formality. Over the time you own the place, that one word quietly bills you tens of thousands of pounds that a freeholder never pays. Not for bricks, not for repairs, but for the arrangement itself. This is a model of what that costs.

Almost every flat is leasehold. Almost no house is.

First, the scale of it. We ran the tenure split on HM Land Registry Price Paid sales for the whole of England and Wales in 2024 — 929,025 registered transactions. The pattern is stark:

• 98.0% of flats sold were leasehold (160,075 of 163,415).
• Only 6.1% of houses were (43,618 of 712,128).
• Across everything, leasehold was 23.1% of all sales.

So if you're buying a flat, you are — with near-certainty — buying a lease, not a building. You will own a right to occupy space for a fixed number of years, granted by a freeholder who still owns the ground you're standing on and the roof over your head. That relationship has a running cost, and the running cost is the point.

The median leasehold flat in that 2024 data sold for £238,000. We'll build the model around that number, because it's the honest middle of the actual market rather than a worked example chosen to shock.

The three meters that run on a lease

A leaseholder pays three things a freeholder does not. Each is defensible on its own. Together, over a couple of decades, they compound into real money.

1. Ground rent. Pure transfer — you get nothing for it. It exists because the freeholder owns the land. The Leasehold Reform (Ground Rent) Act 2022 banned it on most new leases (they're now set at a "peppercorn", i.e. zero), but every existing lease keeps whatever it was granted with. A common older figure is £250 a year. On a fixed lease that's £6,250 over 25 years. On one of the notorious doubling leases — ground rent that doubles every ten years — the same period costs £12,500, and it's actively hostile to your ability to resell.

2. Service charge. This is the big one, and it's the honest one — most of it pays for things that genuinely need paying for: buildings insurance, communal repairs, the lift, the roof, cyclical decoration. A realistic figure for a flat is around £2,000 a year, and it rises. Model it at 3% a year and the 25-year total is £72,919. Crucially, some of that you'd pay as a freeholder too — a house owner still insures and maintains their building. The problem with the leasehold version isn't that it exists; it's that you don't control it, can't easily contest it, and a slice of every pound is a managing agent's margin.

3. The lease itself is a depreciating asset. A lease with 90 years left is worth more than the same flat with 70 years left, and the market knows it. The cliff edge is 80 years: drop below it and extending gets sharply more expensive because of "marriage value", the uplift the freeholder is legally entitled to share in. If your lease crosses 80 years while you own the flat, a statutory lease extension is not optional — it's the price of keeping the flat sellable. On a £238k flat, budget a central figure of around £10,000, though it swings widely with the years remaining and the ground rent.

The 25-year model

Here is the whole thing, laid out so you can argue with it. Central assumptions: a £238,000 flat, held 25 years, £250 fixed ground rent, £2,000 service charge growing 3% a year, one lease extension across the 80-year cliff.

But gross isn't the fair number, and we won't pretend it is. Strip out the service-charge spend that a freehold owner would incur anyway — call it £1,200 a year of genuine insurance and building upkeep, which over 25 years at 3% is about £43,751. What's left is the part you pay for the tenure rather than the building: the ground rent, the managing agent's margin and the non-negotiable extras, and the lease extension.

That tenure-attributable cost lands at roughly £45,000 over 25 years on a completely ordinary flat with a completely ordinary lease — near enough half the gross, and the half you get nothing tangible for (£6,250 ground rent + about £29,000 of service-charge margin and non-negotiable extras + £10,000 to extend the lease). On a bad one it climbs fast: a doubling ground rent is £12,500 on its own, and a sub-80-year lease bought without realising can need a marriage-value extension north of £25,000 rather than £10,000. Swap those two in and an otherwise ordinary flat comfortably clears £65,000.

Where the model could be wrong (and where it's conservative)

Honesty about the limits is the whole exercise:

• Land Registry doesn't record ground rent or service charges. Those two figures are illustrative assumptions from typical market ranges, not published transaction fields. The tenure split and the £238,000 median are from the data. If your lease has real numbers, use them.
• Service-charge inflation of 3% is a guess. Blocks with a cladding remediation bill, a failing lift or a Section 20 major works notice have seen service charges double in a single year. The model has no line for a five-figure major-works demand, and plenty of leaseholders have met one.
• Reform is in flight. The Leasehold and Freehold Reform Act 2024 is on the books, and further reform is promised, including a cheaper standardised extension and the abolition of marriage value. Some of it awaits commencement. A flat bought today sits between the old regime and the new one — which is exactly why you should read the actual lease, not the brochure.
• It's conservative on resale. The model prices the extension you pay for. It doesn't price the discount a short lease forces on your eventual sale price, or the buyers who walk because their mortgage lender won't touch a lease under 70 years. That drag is real and it's not in the table.

When leasehold is fine — and when it's a trap

We're not telling you never to buy a flat. 98% of flats are leasehold; avoiding it entirely means avoiding flats. Leasehold is fine when three things are true: a long lease (comfortably over 90 years, so the cliff is someone else's problem), a peppercorn or trivial ground rent, and a service charge that's transparent, roughly in line with the building's actual needs, and backed by a healthy reserve fund. Share-of-freehold and commonhold blocks are better again, because you're on the right side of the ledger.

It's a trap when the lease is drifting toward 80 years, when the ground rent escalates, when the managing agent is opaque, or when there's a known remediation liability the seller is quietly hoping you won't ask about. The cost isn't hypothetical — it's £45,000-plus of your money over the time you live there, and it's decided before you've unpacked a single box.

The single most valuable question you can ask about a flat isn't "how much?" It's "how many years left on the lease, and what's the ground rent?" Ask it first. Then read the freehold-versus-leasehold breakdown, and if you want the specifics on a particular flat — the tenure, the sold history, the area — ask AskHouse about the address or open it in the explorer before you fall in love with the light. Tenure is one lever on price among several — for the whole picture, read what a home is actually worth.

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Methodology: tenure and price figures use 929,025 HM Land Registry Price Paid transactions completed in England and Wales during 2024. The model uses the median sale price. Land Registry records tenure, property type and price, but not ground rent, service charges or lease length; those inputs are stated assumptions rather than transaction data.