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Leasehold or Freehold? What Does It Mean?

When making inquiries regarding buying or selling property, you may find yourself immersed in new territory, surrounded by unfamiliar terminology. Distinguishing the difference between leasehold and freehold is essential in your property research, as it ensures you make the correct decision regarding your individual circumstances. There are advantages and disadvantages to both positions, which should be considered prior to your search and this practical guide endeavours to assist you with your decision.

  • What Is The Difference?
  • It is customary for an advert to immediately make it clear as to whether the property is freehold or leasehold. This is due to the fact that both circumstances carry different implications with varying ownership rights.

    If a property is advertised as freehold, it means that you are buying the land which the property is built on, whereas with a leasehold property you do not own the land it sits on. If a property is freehold, it means when it is sold, the owner is also passing on the land and thus complete ownership. Whereas with a leasehold, it is only possible to own the property for an agreed amount of time, until the lease expires.

    In leasehold adverts, it will usually disclose the length of the lease, and after the lease runs out, the property will revert back to whoever owns the freehold. Due to this fact, freehold properties are usually more desirable, as you are guaranteed to own the property for as long as you wish.

  • The Pros and Cons of Leasehold Properties
  • Leasehold properties tend to be cheaper than freeholds.
  • With leasehold properties it is customary for the owner of the building to carry out maintenance costs, such as gardening and the upkeep of communal areas and hallways. However, you may be required to pay service charges which contribute towards this.
  • Always check how long the lease is, as in many cases leasehold properties are sold with a 999 year lease, so there is no risk of ownership running out.
  • Buyers should be aware that it is sometimes difficult to obtain a mortgage on a leasehold property with a shorter lease, such as 99 years.
  • It is also advisable to check if there are restrictions on how the property can be used. For example, restrictions regarding whether it is possible to own pets or if you can carry out building work on the property.
  • Sometimes the owner of the building will charge an additional cost known as the ground rent, which essentially pays the owner for the land being rented.
  • The Pros and Cons of Freehold Properties
  • If you are a freeholder, you are entitled to the land the property sits on. Thus, you do not need permission (apart from standard council permission) to make alterations to the property.
  • You are also not liable for ground rent or service charges as you may be with leasehold properties.
  • The value of the property will not decrease due to the lease running out. However, the properties tend to be more expensive than leasehold for the same location.
  • As an independent estate agent in Stevenage, we can make decisions quickly and tailor our property service to meet your specific requirements. Contact us today on 01438 367753 or via

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