Freehold and Leasehold
Property classifications on homes
When buying or selling a home or flat, it is important to know whether the property is freehold or leasehold.
Both offer different options and rights which may appeal to you depending on what you look for in a property.
Freehold gives you exclusive rights to both the entire property and the land on which it sits. Nobody else has a claim to that land, and as the freeholder you have the right to make changes and alterations to the property when and as you wish, so long as they don’t fall foul of planning laws and legislation.
One disadvantage to freehold is that the responsibility for costs and repairs required for the property ultimately falls to you.
A flying freehold exists where a part of a freehold property covers an area which is part of another freehold property, e.g. a balcony overhanging next door’s garden, an attic which extends over the property along from yours.
Flying freeholds create extra work for conveyancing solicitors and therefore mean you may end up paying a little more in legal fees.
When you've purchased a house or flat with leasehold, you only own the right to live in that house and flat rather than the land itself. In certain circumstances the clauses in the lease can alter and change what you are able to do with the building, and it's often difficult to compare leases like for like as some are more flexible than others.
Leases last for a set period of time; while most will be over 75 years, if yours is shorter you'll find it difficult to secure a mortgage with most well-known lenders. Often it's possible to negotiate a lease extension as part of your purchase, but be warned as this can incur additional costs.
Also once you've purchased a leasehold property you can incur additional costs from the freeholders both as one off events and ongoing charges. These can include ground rent, service charges and other management fees.
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