The Myth: Freehold is Always Better Than Leasehold
Freehold is generally preferable, but dismissing all leasehold properties misses genuine opportunities. Understanding lease length, service charges, and ground rent is what matters — not the tenure type alone.
For most residential property investors, a strong preference for freehold is rational. But blanket avoidance of leasehold is an overcorrection that rules out large segments of the market — including most purpose-built flats, which are almost universally leasehold.
The correct analysis focuses on: lease remaining (below 80 years triggers mortgage difficulties and lease extension costs), ground rent (since the Leasehold Reform Act 2022, ground rents on new leases must be peppercorn/zero, but older leases can have problematic doubling clauses), service charges (review 3 years of accounts — are they reasonable and well-managed?), and the freeholder's reputation. A well-managed leasehold flat with 150 years remaining, a peppercorn ground rent, and a responsive managing agent is a perfectly viable investment.