Sarah is here to help house buyers and sellers get to grips with the conveyancing process. This month, she discusses the key differences between leasehold and freehold properties…
Freehold and leasehold are different types of tenure on a property. When you agree to buy a house, you need to know which category it falls into and understand how it might affect what you can and cannot do while living there.
What is freehold?
If the property you wish to purchase is freehold, it will mean you own it and the land it sits on, outright and can sell it whenever you wish, without needing permission from a third party.
As long as the house complies with government legislation, there are unlikely to be any restrictions on what you can do with it, however, you will be solely responsible for the maintenance costs.
The majority of properties on the market are freehold, but due to the historical ownership of land in and around Sheffield, there are more leasehold houses than you may find in other parts of the country. Those properties subject to shared ownership schemes, are also usually leasehold.
Buying a freehold property means you don’t have to worry about the lease running out or the cost of ground rent and service charges, which are an ongoing liability.
What is leasehold?
Leaseholds are a little more complicated than freeholds, but are nothing to worry about, provided comprehensive checks are carried out before you purchase the property.
Whilst you will own your house outright, you will not actually own the land it sits on, although the lease will give you the right to live there for a defined number of years.
Leaseholds are the most common type of tenure for flats and apartments, but as mentioned above, Sheffield also has an unusual number of leasehold houses.
The length of a lease can vary, but generally, a new one will run for around 99 years. Some, particularly older ones in our area, were drawn up for 999 years. Generally, if a lease comes to an end, ownership returns to the freeholder or ground landlord, unless it is extended. Therefore, it is vital you don’t let it expire.
You can read part 2 here…