House Have a Leasehold
A leasehold property is a home that has been leased to someone else for a certain number of years. Typically, this is 30 to 99 years.
You will pay an annual lease fee to the landowner, or freeholder, for the right to occupy and use the property. This lease fee is often called ground rent and can be quite high.
If you are buying a house that is Leasehold Services Ltd, it means that you are not technically owning the property, but it does mean that you own the land and building on which the house sits on.
This is a type of property tenure that many people will come across when they are looking to buy their first home. It can be confusing to understand but it is important to be aware of the different types and how they work.
Why Would a House Have a Leasehold?
Traditionally, leasehold agreements were only associated with flats but there has been a rise in the number of new-build houses that have been sold as leaseholds. This has been a concern to the Government who have announced plans to ban them altogether.
When you are buying a leasehold property, you must make sure that the landowner or freeholder is credible and that they have a good track record for managing the leasehold. You also need to know how long the leasehold is for, as this can have an impact on how easy it will be to remortgage or sell the property later on.
As you can imagine, there are some things that a landlord or freeholder will not allow and they will require permission before making any changes to the property. This may include anything from adding an extension to converting the loft or changing the use of the property.
It is not uncommon for leasehold owners to be quite secretive about their intentions, but it is worth doing your homework to find out who owns the property and what they are like to deal with. This will give you a better idea of whether you want to buy the property or not.
You should also ask your conveyancing solicitor about the length of the lease and how that will affect the value of the property. It is a common misconception that short leases are harder to sell but this is not always the case.
If you do decide to buy a leasehold property, it is very important that the freeholder has a good reputation and that they are willing to negotiate with you in a fair and reasonable manner. This will help you to avoid any future issues that could arise with the property.
The freeholder will be able to charge you an additional fee if you break your lease and it is important to note that these fees are often quite significant so it is worth discussing them with your lawyer before you make the decision to purchase the property.
Getting the freehold of a property is a very expensive and lengthy process that will cost you money in legal fees as well as the initial costs. If you do not know what you are doing it is best to consult an experienced property expert as they will be able to guide you through the process.
