Freehold vs Leasehold: Which Should You Buy?
Key Differences Explained
Freehold means perpetual ownership of the land — the property never reverts to the state. Leasehold (typically 99 years) means the land reverts to the government upon lease expiry. The practical implications are significant: freehold properties are easier to finance as they age (no lease decay concerns for banks), retain value better in the long run, and are increasingly rare as the government primarily sells land on 99-year terms.
Investment Perspective
For short-to-medium term investment (5-15 years), leasehold properties often deliver comparable or better returns due to lower entry costs and similar rental yields. For long-term holding (20+ years) or generational wealth transfer, freehold is clearly superior. Leasehold properties begin to experience mortgage restrictions when the remaining lease drops below 30-40 years, affecting both buyers and sellers.
Making Your Decision
Choose freehold if: you plan to hold long-term, want a generational asset, prioritise capital preservation, or are buying in a prime location where freehold scarcity adds value. Choose leasehold if: you want lower entry costs, plan to hold for under 15 years, prioritise rental yield percentage, or the specific development offers better features for the price.