This is were a flat is owned along with
the freehold of the land on which it is sat. freehold flats are notoriously
difficult to get a mortgage on because, if they do not benefit from some sort of
legal contract from the owner of any supporting or adjacent property, major
difficulties can be experienced in the event of anything affecting them
structurally (e.g. subsidence.)
A good example of a potential problem would be a flat on the first floor of a
building has some storm damage on the roof but the owner does not have the funds
to repair it. This in turn leads to damage the value of the property on the
ground floor but the owner of that property can do little about it.
Commonly leaseholders can club together to buy the freehold to a block now this
is not considered a bad thing as long as the freehold is kept separate and run
on a committee basis so no one person can influence things.