Charlotte White, Sales Negotiator at Sewell & Gardner, explains the difference between Freehold & Leasehold.
“Many people ask me before they go to a viewing “is this property Freehold or Leasehold?” and “What is the difference between the two?” Some buyers think that leasehold properties are only flats. Now I can see why the general public, and especially first time buyer’s would think this. Leasehold properties are probably around 90% flats, however you will find the occasional house which comes up on a long lease. The best thing to do is ask your estate agent with any queries you may have about the property.
In brief, the correct meaning for Leasehold is owning a property for a fixed term but not the land which it stands on. The position of the property in question will be subject to the payment of an annual ground rent and more often than not in the case of flats, a maintence charge for the upkeep of the building and communal areas. When the lease expires the ownership of the property reverts back to the freeholder.
Interesting Facts to Know About Leasehold:-
- Lease lengths vary
- Mortgage lenders like there to be at least 50 years left at the end of a mortgage term, some request there to be more than this. For example 99 years left remaining. You will want to check this prior to offering on a property.
- The lease can often be extended by an agreement with the freeholder at a specific cost.
Freehold is a lot more simple to understand. It is where you take outright ownership of the property and the land which it stands on. The best thing about freehold is you do not have to pay any ground rent and you as the owner have no limit to the period of ownership.
Some properties will also be ‘Share of freehold’, this is normally the case when the freehold has been transferred to the owners of the properties in the building so that between them, they each own a share of the freehold. Rents and maintenance charges in a share of freehold situation can vary and I would suggest speaking to the esate agent representing any share of freehold property to find out more.
At Sewell & Gardner we have a variety of leasehold, freehold and share of freehold properties available to buy, to find out more do not hesitate to call me on 01923 776400.”
Charlotte White – Sales Negotiator