When buying or selling a house, many terms you come across in the process can seem like a whole other legal language. We often find that the issue of whether a property is freehold or leasehold causes confusion for many of our clients.
Freehold and leasehold are two very different forms of legal property ownership. The two can make a difference between whether you own a home outright or have a landlord so it’s useful to get to know the pros and cons of freehold and leasehold properties before you look to buy.
As a leaseholder, you have a lease from the freeholder (the landlord). You can own the right to occupy the property, but not the building itself or the land it stands on.
- Leases are granted on a long-term basis, usually ranging from 90 to 999 years, but can be as short as 40 years
- You own the property for a set period of time
- A legal agreement (lease) is in place with the freeholder (landlord), which outlines both of your legal rights and responsibilities
- The leaseholder usually pays an annual “ground rent”, services charges, maintenance fees, and their share of the buildings insurance to the freeholder
- At the end of lease, the ownership will revert back to the freeholder.
If you own the freehold, you own the property and the lands that it stands on.
- The property is in your name in the land registry as ‘freeholder’
- You wont have to pay rent
- The upkeep and maintenance of the property is your responsibility, including any repairs
- You wont be subject to various landlord charges that come with leasing
- You have freedom to dispose of the property at will
- Freehold properties are likely to be more valuable.
It is sometimes possible to extend the length of a lease or buy a share of the freehold – a process known as enfranchisement.
Whatever the case, ensure you get professional, legal advice.
Entrust your sale and purchase to Peter Robinson & Co. We can deal with all aspects of your sale and purchase, be it leasehold or freehold, ensuring all property transactions run smoothly. To find out more about how we can help, call us now on 0161 678 7996.