When buying a property, the type of tenure – leasehold or freehold – will impact how much it costs, what you can do with it and whether you can sell on later. The difference may seem like a technical detail, but it can make a big difference to your long-term plans and the level of flexibility you have over your property. The most suitable option for you will depend on your lifestyle preferences, your budget and the property market where you’re looking. Read on for tips from property pros and legal experts to help you decide which type of tenure is right for your next home.
What is the difference between leasehold and freehold?
Purchasing a freehold property gives you full ownership of the building and land that it sits on indefinitely. This is a more traditional form of property ownership and tends to be the favoured option for those with a longer-term view to their purchase. However, freehold property can be more expensive as you’re paying for both the property and land upfront. For more https://www.4brothersbuyhouses.com/
Leasehold property grants you the right to occupy a property for a certain number of years, typically 99 or 999 years, as agreed in a lease agreement with the freeholder. When the lease expires, ownership reverts back to the freeholder unless you have negotiated a lease extension with them. If you decide to buy a leasehold property, it’s important to understand the terms of the lease and any additional fees such as ground rent and service charges.
One of the main drawbacks to leasehold property is that it can be difficult to sell on when you want to move on, particularly as the lease approaches its end date. You will have to pay a premium for the freeholder to extend the lease, and the cost can be significantly higher than if you bought a freehold property with the same number of years left on the lease.
However, you can also choose to convert your leasehold property into freehold at the end of your lease if it meets certain criteria set out in the Leasehold and Freehold Reform Act. It’s worth seeking the advice of a solicitor or surveyor before undertaking this process to ensure you are aware of all the implications and that your home is suitable for freehold conversion.
