Leasehold buildings insurance

Who’s responsible for leasehold buildings insurance?

If you own a leasehold flat, you may find that your freeholder has already taken care of buildings insurance for the property. Many freeholders buy buildings insurance themselves, then charge leaseholders a share of the cost, via their service charge.

There’s no guarantee that your freeholder has arranged buildings insurance, though, so you’ll need to check the lease or have your solicitor check on your behalf. If the freeholder hasn’t arranged cover, you’ll need to get your own buildings insurance.

If there are multiple flats in the building, you may find it’s easier (and possibly cheaper) to club together with the other leaseholders and buy a policy.

What does buildings insurance cover?

Buildings insurance covers the cost of repairing or rebuilding your home in the event of:

  • storms, floods, fire and explosion
  • vandalism and theft
  • fallen trees and lamp posts
  • frozen or burst pipes.

Typically, your buildings insurance will cover all costs associated with repairing or rebuilding your home. This includes architect’s fees, site clearance and, where necessary, alternative accommodation.

Want to know exactly what your policy covers? If you’re a leaseholder, you have a right to ask the freeholder if you can see the buildings insurance policy.

Frequently asked questions

I’ve received a demand for my share of leasehold buildings insurance. Do I have to pay it?

You’ll need to check the terms of your lease - it might require you to pay a share of the buildings insurance. Your lease should clearly spell out who’s responsible for arranging building insurance cover and what that cover should include.

The freeholder is charging me too much for insurance. What are my rights?

If you think you’re being charged over the odds for your buildings insurance, you’re within your rights to ask your freeholder for a copy of the insurance policy. If you’re not happy with the cover and the freeholder isn’t prepared to negotiate with you, you could choose to take them to a tribunal, where an independent judge will decide the outcome of the dispute.  

It might be worth discussing the matter with other leaseholders in the building, as the freeholder might be more readily persuaded by you all acting together.

What to know if you have to buy leasehold buildings insurance

In many instances, the freeholder/managing agent will buy buildings insurance, but it’s important to confirm that cover is in place before you move in.

If you find you’re responsible for arranging buildings insurance, you need to ensure you have cover for the rebuild cost of the building, not the market value. Read our guide on how to calculate the rebuild cost of your home.

Where can I get leasehold buildings insurance?

The best way to get the right policy for your needs is to shop around. To compare with us, you just need to provide a few details about yourself and your home, and we’ll find you a range of quotes from UK insurance providers in a matter of minutes. So why not see if you could save?

What other leasehold charges will I need to pay?

If you’re a leaseholder, there are likely to be other charges you’ll have to pay. The main one of these is a service charge. Usually paid monthly, your service charge is designed to cover communal repairs and maintenance, as well as any improvements to the building.

If your building boasts lots of extra features, such as lifts, a gym or a 24-hour concierge, you’re likely to pay a higher service charge. If you’re worried that your service charge is too expensive, you’re perfectly within your rights to ask to see how it’s worked out and spent. You can also ask for receipts.

As a leaseholder, you may also have to pay ground rent if your freeholder sends you a written demand for it. Your freeholder can approach you for unpaid ground rent going back six years. But they can only increase it if this is set out in the lease, or you agree to the increase.

You must pay any ground rent you owe, otherwise your freeholder could take legal action against you.

What other insurance do I need?

Along with buildings insurance, you may also want to consider contents insurance. This can cover the cost of replacing your belongings if they’re destroyed, damaged or stolen.

 How much does buildings insurance cost?

Buildings only insurance from
per year**

Buildings and contents insurance from
per year***

Contents only insurance from
per year****

**50% of people could achieve a quote of £115.00 per year for their buildings home insurance based on Compare the Market data in November 2020.

***50% of people could achieve a quote of £147.00 per year for their buildings and contents home insurance based on Compare the Market data in November 2020.

****50% of people could achieve a quote of £68.00 per year for their contents home insurance based on Compare the Market data in November 2020.

How much you pay for your leasehold buildings insurance will depend on a lot of factors, including where you live and what type of property you have.

When calculating your premium, insurance providers will consider how much it would cost to rebuild your house (this is different to the market value).

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What do I need to get a quote?

To get a leasehold buildings insurance quote, you’ll need to know some basic information about your property, such as:

  • when it was built
  • what it’s made from
  • how many rooms it has.

It’s helpful to know how much it would cost to rebuild your property. But don’t worry if you’re not sure – we can always give you an estimate.

Chris King

From the Home team

“If you haven’t already, it’s worth checking the details of your lease to see if you’re responsible for contributions towards maintenance and protection of the communal areas of the building. You may have already received a bill for this and, therefore, your payments are likely to already be set up correctly.”

Why use Compare the Market?

Save up to £104 on your home insurance^^

Get a quote in just 12 minutes^^^

96.2% of customers found our home insurance experience easy or very easy.^^^^

^^Based on online independent research by Consumer Intelligence during November 2020. 50% of customers could achieve this saving on their Buildings and Contents insurance through Compare the Market.

^^^On average it can take less than 12 minutes to complete a home insurance quote through Compare the Market, based on data in November 2020.

^^^^For the period 1st September 2020 to 30th November 2020, 1,785 people responded to the question “When completing a quote using CtM, how did you find it?” 1,717 responded with ‘easy’ or ‘very easy’ (96.2%).

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