Difference Between Leasehold and Freehold Property

Leasehold: Method of owning property (usually a flat) for a fixed term but not the land on which it stands. ... Freehold: Outright ownership of the property and land on which it stands. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership.

1. Is Freehold better than leasehold?
2. What are the disadvantages of buying a leasehold property?
3. Why is leasehold a bad idea?
4. Are leasehold properties a good investment?
5. What are the advantages of buying a leasehold property?
6. Can you turn leasehold into freehold?
7. Is it hard to sell a leasehold property?
8. How many years should a leasehold property have?
9. Is a 999 year lease as good as freehold?
10. What happens when a lease runs out on a property you own?
11. Can I buy my leasehold?
12. What happens when your leasehold runs out?

Is Freehold better than leasehold?

Cost. Freehold is often more expensive than leasehold at the outset. ... However, it's worth doing a long term comparison, as although the freehold may cost more upon buying it, leasehold buildings often come with ground rents, service charges and even admin fees.

What are the disadvantages of buying a leasehold property?

Some other potential disadvantages of buying a leasehold property include:

• Less flexibility with house renovations – if you're wanting to make significant changes to your property, you'll probably need to get permission from your landlord.
• More restrictions e.g. not being allowed pets.

Why is leasehold a bad idea?

Some of the cons of leasehold include: You might need to pay an annual ground rent or service charge, both of which could be expensive. You may not be allowed to carry out major refurbishment or extension works. Sometimes this will require consent from the freeholder, and there's no guarantee they'll say yes.

Are leasehold properties a good investment?

For example, the majority of flats in central London are leasehold. Even after factoring in service charge and ground rent payments, the average London investor buying a leasehold 20 years ago would have comfortably outperformed most freeholds elsewhere in the UK.

What are the advantages of buying a leasehold property?

There are numerous benefits to buying a leasehold property, including:

• Peace of mind that your communal areas are looked after and managed.
• Easy to raise issues, such as that of a noisy neighbour, directly with the freeholder.
• Your building insurance is taken care off – you don't need to do anything.

Can you turn leasehold into freehold?

Legislation has made it easier for leaseholders to take control and buy their freehold, effectively giving the freeholder the boot. It's all about a legal process called collective enfranchisement, which gives you the right to club together with other leaseholders to buy the freehold for a fair market price.

Is it hard to sell a leasehold property?

Selling a leasehold property is just like selling any other property. There's a little more paperwork to hand over, but your solicitor or conveyancer will know how to deal with it. Things only change if your lease is short, in which case it might be hard to find a buyer.

How many years should a leasehold property have?

Leasehold means that you just have a lease from the freeholder (sometimes called the landlord) to use the home for a number of years. The leases are usually long term – often 90 years or 120 years and as high as 999 years – but can be short, such as 40 years.

Is a 999 year lease as good as freehold?

Put simply, acquiring a 999 year lease enables a flat owner to have a title that is 'as good as freehold' and therefore more marketable than for example a 85 year lease, whilst retaining the existing freehold/leasehold structure.

What happens when a lease runs out on a property you own?

Once the lease expires, the property reverts 'back' to being a freehold property, where both the building and the land it is on are under the ownership of the freeholder. ... Buying a freehold property means that you're the owner of both the building and the land it stands on.

Can I buy my leasehold?

Leaseholders who own a house can buy the freehold of their house either under the law if they meet certain criteria (formal route), or by asking the freeholder to see whether they are willing to sell the freehold informally (informal route).

What happens when your leasehold runs out?

If you have a leasehold flat, you do NOT have ownership of it. At all times the ownership of the property remains with the freeholder (landlord). ... When a lease runs out, you no longer have tenancy, and the freeholder has full use of the property again.