There are numerous things to think about when buying the property. One of the decisions you’ll have to make is whether you want to purchase freehold, which implies that you own your home and land for free or leasehold, which is when you lease the land to the owner.
As per research more than half of people who bought a leasehold over the last decade weren’t aware. However, it’s essential to understand the nuances of leasing a property, and look over the pros and cons before buying.
What is an Leasehold property?
Leaseholds grant you the right to own of the lease, which gives you the right to make use of the property. However, technically, you do not own the property however, you can buy and sell the house. It’s essentially a lease to the freeholder. This means that you’re expected to pay a fee, which includes charges for service and ground rent. It is also possible to seek permission prior to making changes that are made to the property for example, making an extension or tearing down walls.
Flats are generally leasehold, and are owned by a construction company or a builder. However, the amount of leasehold new homes being built is on the rise, especially those offered through the Help-to Buy scheme.
If you have a leasehold property and require help renegotiating to lease contact Leasehold Services.
The benefits of leasehold
There are many benefits of purchasing a leasehold home that include:
Relax knowing you know that the communal space is well looked after and maintained
It is simple to raise any issues like that of an unruly neighbour in direct contact with your freeholder
Your insurance for your building is covered You don’t need to take any action
Leasehold means no need to worry and some buyers view as a huge benefit.
The disadvantages of Leasehold
The disadvantages of leasehold are:
You must obtain approval from your freeholder prior to making major modifications to your property
Research has shown that leasehold homes may be less easy to sell. 33% of those who tried to sell their house struggled since they didn’t have the freehold. 25% of buyers are have been put off by the idea of having a leasehold
The ground rent is assessed continuously that, in time, could become expensive since the landowner is entitled to the power to alter the leasehold agreement.
If you are buying a leasehold home be cautious of leases that have under 80 years left since it may cause problems when remortgaging. Be sure to check the number of years that remain on the lease prior to purchasing the property.
While there are many benefits to buying a leasehold home but the complexities of the agreement will require extensive study and comprehension prior to signing. Always seek advice and guidance from a reliable service.
Zero Down Lease
86-90 Paul St, London EC2A 4NE
020 3856 8300