When you buy a property in England and Wales, it will either be a freehold or a leasehold. In this article we look at the differences between freeholds and leaseholds, explaining everything you need to know about the two.
What is a freehold?
If you purchase a freehold property, you will own the estate in its entirety. This includes the buildings, the land, and anything else found upon the land. You will therefore have the right to live there as long as you choose, and you have the right to making any alterations and modifications you wish, as long as they comply with planning and building regulations.
However, when you own a freehold, you are also bestowed with certain responsibilities. For example, you will have to carry out any repairs or maintenance work that is required. Although you may think this is something that is up to your own discretion, you must remember that you will be responsible for the health and safety of people who are permitted onto your estate. If you fail to carry out a repair and a visitor is injured, you could be held liable.
There is also such as thing as a ‘flying freehold’. This is when part of a property overhangs somebody else’s land. Although it need not be up in the air, a common example of a flying freehold is when a balcony overhangs a garden that is not incorporated in the property freehold. While a flying freehold is not uncommon, it can represent something of a grey area in the eyes of the law, so it is best to seek advice if you wish to carry out any modifications.
What is a leasehold?
If you purchase a leasehold, you are actually buying a right to live in the property for a specified amount of time; you do not own the property. Instead, the freeholder who owns the property and the land will grant you the right to reside in the property, the terms of which will be laid out in the lease. This will stipulate how long the lease will last (usually 99 years), how much ground rent you must pay a year (to cover the cost of communal maintenance repairs) and how ground rent is split amongst other leaseholders. It is usually possible to extend the lease after it has expired; otherwise the property will return to the freeholder.
Many will wonder why anyone would purchase a leasehold, as you do not actually own the property. However, the majority of flats are leasehold, which means everyone splits the cost of common part repairs fairly. While it is true you must take care to review the contract before signing, a leasehold can actually have many benefits, as it will not be your responsibility to carry out repairs and maintenance.
Purchasing a property
Whether you are purchasing a freehold or a leasehold, you need to instruct a solicitor who specialises in conveyancing law. This will make your life so much easier, as having a legal expert on your side will ensure you avoid any pitfalls in the contract, helping your transaction run as smoothly as possible.
Contact us today at Roskell Davies solicitors and speak to one of our legal experts. Call 0800 142 2901 or fill in a free online enquiry.