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Leasehold as opposed to Freehold

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  • Leasehold as opposed to Freehold

    Can individual flats in a proposed development scheme ONLY be sold Lease Hold, If so why is this? Also, apart from the fact that the property eventually reverts back to the vendors ownership after a set period of years whats are the other major advantage to selling leasehold as apposed to Freehold?

  • #2
    Hi Jydea.

    To answer your question there are a number of options when it comes to purchasing properties in the UK. They can be freehold, leasehold, share of freehold etc. Freehold is the best (and accordingly) the more expensive option as you buy the property and the land. In a leasehold purchase you pay "rent" to the landlord of the land that the property is built on, commonly referred to as "ground rent".

    When a property is marketed as a share of freehold, typically it means you own the ground in conjunction with the other owners of the complex.

    Typically the lease is " fixed" for a long period of time(could be 100 years for instance), however if the lease is up for renewal in say 5 years this is a less attractive option as the rent increase could be quite substantial and you have no visibility of this before purchase. So these properties may be marketed at a lower price than similar properties in the area with leases expiring further in the future! Always check to see the expiry date of the lease up front.

    LK

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    • #3
      That is some info there. I was not to sure on the difference myself.

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