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Leasehold buildings insurance

If you live in a block of flats, you might not need to buy leasehold buildings insurance. Normally a management company pays and arranges it for the building or complex. But there are some situations where you might be responsible and will have to arrange your own cover. We can help you to find out where you stand, and compare quotes where possible.

All of the home insurers we work with offer buildings insurance, covering different types of property. But they can’t offer insurance on a purpose-built or converted block of leasehold flats. Buildings insurance doesn't cover a single flat in a block, either - for this you will need a specialist policy to insure a building with multiple homes. We don’t offer this type of cover, but you can find specialist insurers who do.

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What is leasehold buildings insurance?

It’s a type of home insurance policy that covers leasehold property owners for any structural damage that happens to a building. You're a leasehold owner if you own a property that's leased from the owner of the land - also called the freeholder - for a set period of time.

It's important for a leaseholder to have this type of buildings insurance as unexpected events - such as a storm, flood or fire, or burst pipes - can happen. And if you're not already covered, you could find yourself having to pay a hefty bill.

Leasehold buildings and flats are common, more so in England and Wales. According to GOV.UK there were 4.86 million leasehold properties in England on the Land Registry alone in 2021. This makes up 20% of all property registered that year.

Who pays for building insurance on a leasehold property?

The terms of the lease usually say who's responsible for paying for buildings insurance. Often there can be many leaseholders under a single building. This creates confusion over who's actually responsible for getting leasehold buildings insurance.

It’s common to find that a leasehold property is a flat in a building or block with at least one other. The majority of flats have a management company and the regular service charge you pay goes towards your building's insurance, upkeep, maintenance and repairs when needed.

But just because you pay a management fee doesn’t mean that the management company has arranged the insurance too. You should always check with them first and make sure you’re clear on what they pay for and what’s included in any insurance for your block.

Can I insure a leasehold house?

Yes, we can compare quotes and offer you insurance if you own a leasehold house. Because these are single properties, it’s highly likely it’s your responsibility to get buildings insurance. You should check the terms of your lease first though.

Although less common, there were 1.4 million leasehold houses on the Land Registry throughout England in 2020-21 according to GOV.UK.

What is and isn’t covered by buildings insurance?

Buildings insurance for a leasehold building is the same as for any other building type. It should cover the cost of repairing or rebuilding your home and any associated costs.

It should cover you if it's damaged by:

  • Subsidence
  • Storms and floods
  • Fire and explosions
  • Malicious damage, such as vandalism
  • Falling trees or lampposts
  • Frozen or burst pipes

Insurance providers should also cover damages in communal spaces of the leasehold property. This includes shared gardens, hallways and landing areas. Every policy is different and will have standard features or optional extras.

Typically building insurance doesn't cover you for:

What our home insurance expert says

"It can be confusing to know who's responsible for building insurance in a leasehold property. This is particularly the case in flats where a management company often pays and arranges it for a whole block. Buying buildings insurance for a single flat in a block doesn't cover you for any damage that happens to the building. Instead, the whole block must be covered with one policy.

Always check the terms of your lease, and speak to your management company to find out what is covered."

Is leasehold buildings insurance mandatory

Leasehold buildings insurance isn't mandatory, but your mortgage provider might still request it as part of your agreement with them. They should tell you if you need to be insured but if you're unsure, you should ask them.

Even if it's not needed as part of your mortgage agreement, it's still a good idea to consider it for peace of mind.

What if I’ve bought or own a share of the freehold?

Flats that have been converted from original houses such as Georgian or Victorian buildings are mostly leasehold. But often the owners will own a share of the freehold, especially in England and Wales. The length of the lease in these cases can often be up to 999 years, so effectively it’s like owning a freehold property, especially when you have a share of it. You might also have the option to buy a share of the freehold with other owners in the same block.

In this situation it’s more than likely going to be your collective responsibility to insure the building, unless there's an external management company. It’s common in these types of buildings that all fees you pay to the management company contribute towards the buildings insurance and other costs. As it’s a more complicated arrangement, you may need a specialist company to insure a block of flats in a building.

Can I get a quote if I own a block of leasehold flats?

We're not able to offer buildings insurance quotes for multiple properties in a single location or block. You’ll need a specialist company, but as this is a common occurrence you should be able to find several insurers online who can help. Just make sure you compare as many as possible to get yourself the best deal.

As a leaseholder, do I need to get any other forms of insurance?

Besides buildings insurance, it's also worth considering contents insurance. Contents insurance isn't legally required, but it does help protect your belongings if they're ever damaged or stolen.

If you decide you want contents cover, make sure you don't under or overestimate the total value of your contents. If you get it wrong you could end up either not having enough cover for the costs to replace your items, or you could be paying too much.

You can work out the value of your contents using our contents calculator.

Buying buildings insurance along with contents insurance under a single policy might make it cheaper and easier to make a claim. But this is only relevant if you're able to buy buildings insurance for your leasehold property.

What other leasehold charges will I need to pay?

As a leaseholder, you might have other charges you need to pay to help maintain the property. This includes:

Service charge

Service charges from the freeholder allow you to contribute toward any costs for the maintenance and repairs of the shared areas in the building. This often includes the buildings insurance policy for the block. If your property has extra facilities like a gym or concierge, expect your service charge to be higher.

Ground rent

You pay ground rent annually for the land your home is built on. It's part of the lease conditions given by the owner of the land. But if you've bought a new lease with an agreement of more than 21 years since June 2022, the Leasehold Reform (Ground Rent) Act has put an end to ground rent payments.

Emergency repair/sinking funds

Part of your leasing agreement may ask for you to pay into an emergency or sinking fund. This allows your freeholder to build up enough money to cover the costs of making urgent and unexpected repairs to the building, such as fixing the roof.

What if I think my freeholder is overcharging me for insurance?

If you feel you're being overcharged for buildings insurance, you have the legal right to ask the freeholder for a copy of the insurance policy. The copy must show:

  • How much the building is insured for
  • The name of the insurance provider
  • The full policy details including what’s covered

If your freeholder doesn’t respond to your request or you think the charges are unreasonable, you have a right to challenge the cost through a tribunal. Before taking any action, talk to other flat owners in the building as the freeholder could be more willing to act if multiple owners make contact together.

How do I work out the rebuild cost of my building?

Your buildings insurance provider should ask you for a rebuild figure in case your building gets damaged beyond repair. It's important that this figure is as accurate as possible so that the insurer is able to give you the right amount of home insurance cover.

You can use the Royal Institute of Chartered Surveyors (RICS) Building Cost Information Service (BCIS) to roughly work out the rebuild costs.

The calculator asks for:

  • Type of property
  • Property age
  • Number of rooms
  • Type of roof and walls
  • The area of the external floor in square feet or metres

To find out how to get an estimated figure, see our guide on calculating the rebuild cost of your home.

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