Some properties are bought and sold on a leasehold basis. When this occurs, it means the property is bought, but the land on which it stands is not part of the purchase. The land is owned by the landlord, and therefore the property owner will typically pay ground rent or a service fee to the landlord to reflect the leasehold status. The amount paid in these fees can vary hugely between properties, depending on who the landowner is.
If you are looking to buy a property and you find a leasehold you like, it is important to find out what the length of the lease is. There are many possibilities here, but the shorter the lease is, the harder it can be to get a mortgage for the property. Oftentimes, leases run for 90 or more years though, perhaps even for several hundred years in some cases.
Flats are often sold on a leasehold basis, because several flats are built on the same land. Since flats are organised on floors above one another, the leasehold status makes sense in this case. While housing developers did go through a stage of building new houses on a leasehold basis, this will now be banned by the government.
While flats are commonly available on a leasehold basis, it is important to consider what this means for you as a flat owner. You must adhere to all rules laid down as part of the lease. For example, you may not be able to keep pets in the property. Always read these rules carefully prior to putting in an offer for such a property, especially regarding the length of time remaining on the lease.