12. Types of property ownership

Property ownership in England and Wales is governed by specific laws and regulations that determine the rights and responsibilities of property owners. Understanding the different types of property ownership is essential for anyone involved in buying or selling property in these jurisdictions.  

Here are the main types of property ownership: 

• Freehold: Also known as fee simple ownership, freehold ownership grants the most complete form of property ownership rights. When you own a property freehold in England and Wales, you have full ownership rights over both the land and any buildings or structures on it indefinitely. This means you can use the property as you wish, subject to any local planning regulations, and you have the right to sell or transfer it at any time without restrictions. 

• Leasehold: Leasehold ownership involves owning a property for a fixed period of time under a lease agreement with the freeholder, who owns the land. In England and Wales, leasehold ownership is common, particularly in the case of flats or apartments. Leaseholders have the right to occupy and use the property for the duration of the lease, but they do not own the land outright. Instead, they pay ground rent to the freeholder and may also be subject to service charges for the maintenance of common areas. At the end of the lease term, ownership of the property reverts to the freeholder unless the lease is extended or renewed. 

• Commonhold: This is a form of property ownership introduced by the Commonhold and Leasehold Reform Act 2002 in England and Wales. It allows for the freehold ownership of individual units within a multi-occupancy building, such as a block of flats or apartments. Each unit owner is a member of a commonhold association, which collectively manages and maintains the common areas of the building. Unlike leasehold, commonhold ownership is perpetual, and unit owners have more control over the management of the property.