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Glossary / Property

Leasehold

Leasehold ownership is the right to occupy a property for a fixed term of years while the freehold remains with someone else, after which the property reverts to the freeholder.

The remaining term is the asset. A long lease behaves much like freehold; a short one is a wasting asset that gets harder to mortgage and harder to sell as the term runs down.

In the UK, leasehold flats also carry ground rent and service charges set by the freeholder, which is a common source of unpleasant surprises for overseas buyers.

Where people get it wrong

Ignoring the unexpired term. Below roughly eighty years a UK lease starts costing real money to extend, and lenders grow reluctant.

The framework behind it Dubai versus London sets out the rule, the arithmetic and where it breaks.

Read the framework

Related terms

Freehold Freehold ownership means owning the property and the land it sits on outright and indefinitely, which in Dubai is available to all nationalities only in designated freehold areas. Service charge A service charge is the annual fee an apartment owner pays the owners association for maintaining shared parts of the building, quoted in Dubai as dirhams per square foot per year and levied whether or not the unit is occupied.

Investments Playbook publishes educational research and general information. Nothing on this site is personal investment advice, a solicitation, or a recommendation to buy or sell any asset. Property and securities can fall in value. Past performance does not predict future returns. Figures shown are indicative and may be delayed. Always take regulated professional advice before acting.