There are two main types of land ownership in England and Wales, freehold and leasehold. Business premises are usually leasehold rather than freehold. Ready-furnished office space or “serviced offices” are also available.

Freehold

Freehold property is land or buildings which is owned outright. Subject to planning laws, there are no restrictions on the use, disposal or development of this type of land.

Leasehold

Most offices and other commercial properties are leasehold, where the property owner (the landlord) retains an interest in the property and grants a lease of the land to the tenant. The landlord has control over how the property is used and to whom it can be sold.

Lease agreements are not standard. A landlord will produce its own form and the terms will then be negotiated (although there are certain acceptable conventions). The lease will be for a specified period of time (5 or 10 years, or sometimes even 25) but it may be possible to negotiate “break clauses” which give the tenant the right to end the lease at earlier stages. It can take time to agree an acceptable form and until the lease has been completed, a tenant will not generally be allowed into the property.

Serviced Offices

A serviced office is a temporary arrangement which is sometimes suitable for businesses testing the British market before deciding to set up permanently. It is office accommodation with the right to share services and equipment belonging to the owner, for which a licence fee is paid. The agreement for such occupation is not a lease, but it will contain certain obligations which may be significant.