The terms “leasehold” and “freehold” refer to different types of property ownership.
Freehold
When you own a property on a freehold basis, it means you own both the property and the land it stands on, outright. You have full control and responsibility for the property and the land it occupies. Freehold ownership is generally considered the most desirable form of ownership because it allows you greater control and autonomy over the property.
Leasehold
Leasehold involves owning a property for a fixed period of time, as specified in the lease agreement. You have the right to occupy and use the property (for the fixed period of time), but you do not own the land it is built on. The land and the building are owned by the freeholder (also known as the landlord).
Leasehold ownership is often associated with flats or apartments, although some houses can also be leasehold.
Leasehold properties are typically subject to conditions and restrictions outlined in the lease agreement. These may include the payment of ground rent, service charges and other costs.
The length of the lease can vary, but they are often long, e.g. 99 years, 125 years or sometimes as long as 999 years. As the lease term decreases, the value of the leasehold property may also decrease.
Leasehold ownership has been a subject of debate and reform in recent years due to concerns about leaseholder costs and other issues. The government has introduced different measures to address these concerns, and provide greater protection to leaseholders.
If you’re considering purchasing a property, it’s vitally important to understand whether it is leasehold or freehold, as it can have implications for your rights, responsibilities, and potential costs associated with the property.
Read more:
Leases of flats – how long a term is long enough?
https://www.awbclaw.co.uk/leases-of-flats-how-long-a-term-is-long-enough/
Stamp Duty
https://www.awbclaw.co.uk/stamp-duty/
Leasehold property
https://www.gov.uk/leasehold-property
For more information, please contact Declan Hayes on 01756 692888 or email declan.hayes@awbclaw.co.uk.
21 June 2023