Return to the Mortgage Glossary Home to view explanations for all mortgage terms. What follows is the definition for the term Leasehold as it relates to mortgages in the UK. LeaseholdA Leasehold gives you the right of possession, but not ownership, of a property for an agreed period of time. When you hold a leashold on a property, it remains the property of the freeholder. A leasehold is usually for a fixed period of time, and it will set out details of obligations of the leasholder for repairs and maintenance of the property. Generally, the longer the remaining time on a leasehold, the higher its value. A lot of new properties will come with 999 year leases, effectively ruling out the issue of expiring leases. Older leashold properties might have been set up on a 99 year lease, and some of these may have run down significantly. A property with a lease of less than 40 or 50 years remaining may cause large problems when getting mortgage. These short leases need to be discussed with your mortgage lender. Ultimately, ownership remains with the freeholder. The duration of the right of ownership is usually a fixed term granted by the lease. The lease will set out details of rents and obligations such as repairs, and maintenance, rights to access etc. Leasehold is in direct contrast to Freehold where ownership is absolute. A problem can arise with mortgages where the lease has less than say 25 years left to run.
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