When buying a freehold property, you will own the building and the land, whereas when buying a leasehold property, you only own the building, not the land that it is built upon.
The freeholder of an estate owns the land and property outright, and therefore enjoys the right to use the land and the buildings forever, subject to the law of the land. On the other hand, a leasehold property is built upon land that has been granted a lease by the landowner or freeholder for a specific period of time and purpose.
With few exceptions, houses are freehold whereas flats and apartments are almost always leasehold.
What are the advantages of a Freehold Property?
As freehold properties are not built upon rented land, no annual ground rent, service charges or other fees are due to a separate landowner. Additionally, as the land is owned outright, the homeowner does not have to worry about the lease running out or the need to renegotiate new terms.
What are the disadvantages of a Freehold Property?
The homeowner will be fully responsible for the maintenance and upkeep of the property and the land, which can prove costly and time consuming. Purchasing a freehold property is also generally more expensive than a leasehold property due to the aforementioned benefits listed above.
What are the advantages of a Leasehold Property?
The initial outlay for a leasehold property is often lower than buying a freehold property. Ongoing building maintenance of the communal areas and key structural items is usually the responsibility of the freeholder, saving the leaseholder the hassle of having to arrange for these tasks to be undertaken. Communal areas for flats and apartments usually refers to items such as the staircases and hallways. The freeholder is also usually responsible for buildings insurance, which is usually charged as part of the service charges due annually.
What are the disadvantages of a Leasehold Property?
The leasehold property owner will owe annual ground rent to the free holder, as well as often a service charge and other associated charges. The free holder can impose certain restrictions on the leaseholder, such as no pets or needing express permission before changes would be sanctioned. One of the major drawbacks of a leasehold property is the length of the lease. Properties with leases of less than 80 years can be difficult to sell, mortgage, and remortgage. Whilst renegotiation of the lease is possible, it can be an expensive and difficult process.
Are maisonettes leasehold or freehold?
Whilst most maisonettes are leasehold, they can also be freehold. However, one major difference is that a maintenance charge is not usually payable, however the leasehold owner will be responsible for paying for the maintenance along with the other owners when work needs to be completed to the common parts of the building.
When it comes to your property search, we always recommend registering your property search with your local best estate agent, so that they can assist you in your property search. Simply waiting for properties to appear on the property portals will mean you miss out on the best properties, with many properties selling long before they reach the general market.