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What is Freehold Ownership?

Freehold means that you will be the sole owner of the property as well as being the owner of the land the property sits on and is surrounded by. This is often preferred for many buyers as you will not have to pay any additional ground rent or service charges. As the freeholder you are responsible for the repair and maintenance of the building but you will have control over when the repairs are made.

What is Leasehold Ownership?

Leasehold means that you are buying the right to use the property from the freeholder or ‘Landlord’ (the person who owns the building and land it resides on) for an agreed number of years. Leasehold is typically how flats and maisonettes are sold but is also used for houses both new and old.

If you own a leasehold flat or house you are likely to be required to pay ground rent, maintenance fees and annual service charges either on a monthly or annual basis to the freeholder. Sometimes these rents can be very low especially on very old properties but the fees can also range up to and over ₤1000 year and even more in London.

All leases are different so make sure your Conveyancer explains this thoroughly and you understand your responsibilities to the Landlord

  • You may have to gain permission from the freeholder if you want to undertake any major works on your property such as replacing your windows or extending the property
  • You may need to gain permission if you wish to rent the property out
  • Leases can be as short as 40 years or as long as 999 years – but the longer the better
  • If you require a mortgage then the lease usually needs to be to be at least 80 years
  • Leases can be extended or you can apply to buy the freehold of the property from the Landlord but the shorter the time remaining on the lease then the then more costly this becomes

Are you somewhere in the middle?

In the world of Conveyancing, there’s always another option to consider. Often freehold houses, especially on new build estates are sold as freehold but there is a clause in the title giving the responsibility to maintaining the communal areas on the estate such as shared drives, car parks and open spaces to a Management Company. Generally you would, if there is a Management Company, be liable to pay a yearly service charge to the company for its services. Remember to check the small print for any hidden costs even if a property is advertised as freehold.

Have any further questions?

Our specialist team have extensive experience dealing with both leasehold and freehold properties. Simply give us a call on 01623 45 11 11 and we will be happy to help you further.

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