Freehold flat vs leasehold

Should you get a freehold or leasehold property? When the lease ends, ownership returns to the freeholder , unless you can extend the lease. Most flats and maisonettes are owned leasehold , so while you own your property in the building, you have no stake in the building it is in. Some houses are sold as leaseholds.

Firstly, let’s look at the main features of freehold and leasehold properties.

You own the property and land outright. This includes the immediate ground below and airspace above. There are no ownership rights on land by the leaseholder. So, if you own the leasehol you’re still a homeowner.

In other words , if your home is leasehold , congratulations. You’re on the property ladder. Here’s a closer look at freehold vs leasehold.

The difference between leasehold and freehold. So, what is a freehold property and what is a leasehold ? Leasehold : Unlike a freeholder , as a leaseholder you do not own the land the property is built on. 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.

Understandably, freehold assets are more expensive when compared to leasehold assets. Leasehold Property: As the name suggests, here the ownership of the land on which the property is built is leased for a certain amount of time to the developer. 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.

Flats – owning a share of the freehold. If you own a flat, you may also own a share of the freehold of the building containing your flat. If you do not already own a share of the freehol you may be able to get together with other leaseholders to buy the freehold. This is called leasehold enfranchisement or collective enfranchisement. Making a flat more attractive to mortgage lenders is a key advantage of buying the freehold.

When the freehold is purchase the leases can be extended to 9years and modernised where necessary so enhancing the value and marketability of the flats in question.

With leasehold , you own the property itself for a certain period of time agreed with the freeholder, but not the land it stands on. Whereas, with freehold , you have outright ownership of both the property and its land. Difference Between Freehold and Leasehold The main difference is that a freeholder owns the property in perpetuity, whereas a leaseholder owns it for a period of time before ownership reverts back to the freeholder.

Very simply because there is usually a premium of between – on freehold properties. You are master of the domain and the king - or queen - in the castle. However, in a leasehold property, you’re solely owner of the dwelling, not the land. Our practice of freehold and leasehold ownership has its origin in the English Common Law. In China and Hong Kong, there is only leasehold property ownership.

When you buy a property freehol you own the building and the land it’s on until you decide to sell it. But if you buy a property leasehol 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.

A landlord’s interest in a property is usually considered a freehold estate, while a tenant’s interest is usually classified as a non-freehold estate. Learn what a freehold estate is and how it differs from a non-freehold estate. If the flat is freehold that means that you, together with the other residents within the building or estate own the land too. In general, most flats in the United Kingdom are leasehold and most houses are freehold. What Is a Freehold Estate?

Leasehold means that you own the property but you do not own the building or the land that the building is built on.