Purchasing a leasehold property is a different experience to buying a freehold property, as when you own a leasehold property, you only have ownership of the building itself and not the land it is built on. This means that regardless of how long you own the property, once the lease expires – often between 90 and 120 years - it will revert back to the freeholder.

Therefore, when purchasing a leasehold property, you should enter into a contract with the freeholder that outlines your rights and responsibilities as a leaseholder. This will include any ground rent or other annual fees such as maintenance and service charges that need to be paid, and may also determine whether you are able to make any changes to the property, such as extensions.

Are all flats leasehold?

If you are looking to purchase a flat, it will come with a lease as the overall building is owned by the freeholder. The advantage to this is any communal areas such as hallways and gardens are looked after and maintained by the freeholder, this will come with a small charge but will prevent any disagreements with neighbours.

Leasehold is typically reserved for apartments and flats but that isn't always the case. It is also important to note that not all houses come with a freehold – some may be sold as leaseholds instead. This is particularly common with new builds, although since 2019, all new-build homes in the UK have been required to be sold as freeholds.

Freehold or leasehold?

If you own the freehold of a property, then you own the land it stands on as well as the property. This means that any upkeep on the property and land will be your responsibility – whether it be the structure of the home, the possessions inside, the roof, and the garden. You are able to change the structure of the property, for example, by building an extension. However, you will need to get the correct planning permission from your local council.

A leasehold differs from a freehold in the sense that you own the property but do not have ownership over the land that the property sits on. The land that the property is built on is owned by the freeholder, if you have a leasehold, you’re a leaseholder.

When buying a property, be sure to check what kind of ownership you are purchasing – as this can have a big impact on your rights and responsibilities both now and in the future. A mortgage broker can help guide you through the process, ensuring that you make the right decisions when it comes to freehold or leasehold properties.

With the right advice and guidance, you can ensure that you make an informed decision about your property purchase that is in line with your needs and budget. With the right information, you can rest assured that you know what kind of ownership rights you have when it comes to freehold or leasehold properties.

If you are looking for a mortgage, contact us today on 0151 662 0188 or email [email protected].