Freehold vs Leasehold
Do you know the difference between buying a freehold and leasehold?
This is described as the ‘tenure’ of the building and this short article should help to clear up the jargon on the agents particulars.
What does Freehold mean?
Freehold means that you will be the sole owner of the property as well as being the owner of the land the property sits on and is surrounded by.
This is often the preferred option for many buyers as you will not have to pay any additional ground rent or service charges on top of your monthly mortgage payments.
As the freeholder you will not have to rely on someone else to repair and maintain the building. You will also have more control over when repairs are made and managing the maintenance of the property to your own timescales and budgets.
As the freeholder you would be responsible for the ‘fabric of the building’ which consists of the roof, any internal and external communal areas and the exterior walls amongst others.
Did you know: Houses are most commonly freehold, whereas flats and maisonettes tend to be leasehold.
What does Leasehold mean?
If the tenure of the property you are buying is leasehold then you are buying the right to use the property from the freeholder (the person who owns the building and land it resides on) for an agreed number of years. Leasehold is typically how flats and maisonettes are sold.
You are likely to be required to pay ground rent, maintenance fees and annual service charges most commonly on a monthly or annual basis; if this is not fulfilled then the lease can become invalid.
All leases differ so make sure you read yours thoroughly and understand your responsibilities as they can sometimes vary.
Leases can be as short as 40 years or as long as 999 years so always be sure to check, the longer the better! If you require a mortgage then the lease is usually required to be at least 80 years, we would advise to check with your mortgage advisor or lender to get confirmation and peace of mind.
If the lease is less than 80 years then it can become more costly to extend, you can find out more about when to act on a lease extension.
Did you know: You may face restrictions in leases such as no subletting or owning pets!
One final point is that you may have to gain permission from the freeholder, also known as the landlord, if you want to undertake any major works on your property such as replacing your windows or removing internal walls to adapt the layout of the property.
Kempton Carr Croft works with both freeholders and leaseholders of residential property to provide lease extension, leasehold enfranchisement and lease renewal services. If you have any questions or would like a quote for any of our lease services please call our team on 01628 771221 or email firstname.lastname@example.org