This may sound like complicated technical jargon, but these terms can have legal implications that you will need to be aware of when it comes to your home.
Fundamentally, there are two types of ownership when it comes to property: leasehold and freehold. By reading this blog you will understand the differences and in turn be able to make a more informed decision when it comes to your property.
What is freehold?
Freehold is when you own the land or property outright without being tied down to any fixed-term contract. Owning a property outright comes with its perks including complete freedom over your property.
Many people feel more comfortable with freehold due to the flexibility and freedom. You also have the responsibility for all projects including building and maintenance. Ultimately, the property is yours to do with as you please (inside the law). You won’t need to pay ground rent fees (a sum of money that you will usually pay yearly to your landlord). Most importantly, you won’t need to worry about a lease running out. This is a long-term investment.
What are the downfalls?
It is your responsibility to ensure your property and land is in fair condition, that it is not causing any nuisance to neighbours and that it complies with all applicable regulations. You will be legally and financially liable and thus bare the cost of any required action.
What is leasehold?
In simple terms, leasehold means that you have a lease with the landlord. this is usually a signed agreement between the landlord and you the tenant, which agrees on certain restrictions and obligations. The lease will usually consist of some fees that you will pay (maintenance fees, annual service charges, building insurance, ground rent, etc). Leases are usually long-term and can last up to 120 years.
What are the drawbacks?
With a leasehold property, you will have the right to occupy a home, but not necessarily forever. Restrictions may be in place as part of the lease agreement and the above charges can also be incurred. Research and knowing your lease will serve you best here.
So what is the best choice for you?
Reading this you may believe a freehold is the obvious choice, however, the decision is based entirely on your circumstances and financial situation. When you are making your decision, remember to always check thoroughly over documents and contracts and seek an experts opinion on the situation.
N.B. Our legal advisors will take the time to thoroughly go through the details of your transaction and ensure you make an informed decision without confusion. For more advice, don’t hesitate to get in touch with us today.