Does It Matter Whether My Property Is Freehold or Leasehold?
When you are looking to buy a property it is worth considering whether it is Freehold or Leasehold.
What is the difference between a freehold or leasehold property?
If you buy a freehold property then you will own the property and the land it is built on. If you buy a leasehold property then you will own the property but not the land; the land will be owned by the Freeholder.
It is common for flats to be sold as leasehold properties. The freeholder may be the builder or a third party that the freehold has been sold to. Some flats may be sold with ‘share of freehold’, which is more likely if the flat is part of what was once one house, in which case the owner of one flat may share the freehold with the other owners of flats in the same building.
If you buy a leasehold property then you will have to enter a contract with the freeholder of the property. This will give you the right to live in the property for a fixed term, and you will most likely be required to pay certain annual costs such as ground rent, and may need to contribute towards maintenance and service charges. The contract will also set out your responsibilities, such as whether you will need to get permission from the freeholder to carry out any major works to the property, or if there are limitations such as not keeping pets.
Should I buy a leasehold property?
Buying a leasehold property comes with a few more considerations. It is important to know how long is left on the lease of the property. Once there are only 80 years left on a lease then the value of the property may be severely affected and it may be difficult to get a mortgage. You will want to be clear on the affordability of the extra costs of ground rent, maintenance and service charges. You will need to be happy with the terms of your lease set out in the contract.
A leasehold property however may be cheaper to buy depending on the length left on the lease, and you may benefit from sharing responsibility for maintenance costs.
Can I extend or buy the lease on a leasehold property?
Although it is possible to buy a lease, or extend it, this can be an expensive process. At the time of writing the Government is looking to make this less expensive and a more simple process. As mentioned above, if you own a leasehold property you should look to extend or buy before your lease reaches the 80 year mark to avoid considerably raised fees.
If you need help with buying or selling leasehold or freehold properties, then call RDC today on Bingley 01274 723858, Ilkley 01943 601173 or Bradford 01274 735511.