Leasehold vs freehold

With a leasehold , you own the property (subject to the terms of the leasehold ) for the length of your lease agreement with the freeholder. What does freehold property mean? When the lease ends, ownership returns to the freeholder , unless you can extend the lease. In Englan Northern Ireland and Wales, flats are most commonly owned on a leasehold basis, while houses are normally sold as freehold properties.

In Scotlan very few properties are sold as leaseholds. A leaseholder essentially rents the property from the freeholder for a number of years, decades or centuries.

Most flats are sold as leasehold properties with the freehold held by the builder or a firm he or she has sold the freehold to. Also, the rules about leasehold properties are different in Northern Ireland. When you buy a property freehold , you own the building and the land it’s on until you decide to sell it. But if you buy a property leasehold , you own only the building (not the land it’s on) and only for a set number of years. When the term of the lease expires, the property will belong to the landowner unless you can extend the lease.

In my opinion, whether freehold or leasehold is a better choice will depend on a few factors. The demography of buyers buying in the area, the number of freehold properties in the vicinity plays a big part. If there is a lot of freehold property in the area and you are considering a leasehold , it is good that you do a more thorough research.

The freeholder (or landlord ) owns the land and building. Homebuyers buy a ‘lease’ for a property from the freeholder. Most property in England and Wales is owned on a freehold basis, although most flats are leasehold , as are some houses. If you own a leasehold property, you do not own the land on which the property is constructe or the building itself. Instea you have a lease from the freeholder who owns that property for a period of months or years, just to use the property.

A minimum years is usual as most banks won’t lend to you on a Mortgage with less than that. If you have less than years on your lease , you will need to get it extende which can be quite tricky, you need a specialist to help and it. 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. The majority of properties are either freehold or leasehold. Houses are usually sold freehold , but new houses have sometimes been sold as leasehold. Leasehold vs Freehold Leasehold. A leasehold unit that is close to the end of its lease tends to have a lower price in theory because in a couple of decades the owners have nothing to gain from it.

There are a number of differences between freehold and leasehold title but one key distinction: As owner of a freehold commercial property you have exclusive ownership of that property. It is your asset and you can choose whether, and when, to sell it and move out at your own discretion. If you’re unsure what leasehold means, it’s a property which is only partly owned by those who purchase it.

A leaseholder owns the property for the period of time their leasehold lasts up until, but doesn’t own the ground or land that the property is built on. If you acquire a leasehold property you will become a leaseholder, which means that while you own the property, you do not own the land it is built on, as this is still owned by the landlor otherwise referred to as the freeholder.

A freehold property on the other hand gives you ownership of both the building and the land it is situated on. Difference between freehold and leasehold property. Choosing a leasehold or freehold property is not a major concern for most first-time buyers. If you’re weighing up the pros and cons of a leasehold or a freehol here are your top considerations: The length of ownership.

If you opt for a freehol your property will be yours until you sell it, while leasehold properties are yours until the lease period expires and then it belongs to the landlord. Quite simply, the freehold owner (or freeholder) will have the exclusive ownership of the building and land. There is no time limit to the duration of ownership as the freeholder has outright ownership of the property and the land indefinitely. Find out more about enfranchisement The government is looking at how to reform leasehold , including ground rents and enfranchisement, to be fairer to buyers. If a property is freehold , you can own it for an indefinite period.

With leasehold properties, you lease the property for a fixed number of years.