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Property Ownership in London: Freehold vs. Leasehold To enable screen reader support, press Ctrl+Alt+Z To learn about keyboard shortcuts, press Ctrl+slash Turn on screen reader support Rewrite Ctrl D Rewrite Ctrl D

Thinking of buying a property? 

It is undoubtedly a life-transforming decision, but one should overcome the exhilaration of the moment to always be in the right frame of mind to decide after analysing all aspects. While buying a house, one thinks about looking at the deal offered, vicinity, nearby amenities and connectivity. 

However, if you are buying a property in London, there is an important aspect that requires attention, which is ‘ownership’ – is the property you are interested in a freehold or leasehold?

To check the status of the property before buying it;

  1. Visit the Land Registry website. 
  2. Search the property by postcode.
  3. Look at a copy of the building owner’s title to confirm the status.

While answering the difference, this blog by ANWA Properties discusses the pros and cons of both, along with the importance of both types of properties. 

What is a Freehold Property in London?

A Freehold Property is a property in which the freeholder owns all the tangible units of the property, which includes both – the building and the land the property is built on. 

This makes the Freeholder solely responsible for maintaining the property and land.

What is Leasehold Property in London?

A Leasehold Property is a property built on land leased out by a Freeholder, which is leased out for the length of your lease agreement – which usually lasts from 39-999 years, by the freeholder.

When the lease ends, ownership returns to the freeholder, unless the lease is extended. In the case of properties sold under leasehold, you own the unit built and not the land it is built on.

 

Property Ownership in London: Freehold vs. Leasehold

Freehold  Leasehold
Complete ownership of the asset, which makes it an expensive purchase. Cheaper option to avail, however, one often pays an extra cost, services charges and ground rent
Freeholders have permanent control on all the tangible assets. Leaseholders have to renew the lease, especially if it’s less than 100 years.
Freehold property includes all types of houses.  Leasehold property includes all types of flats and apartments usually.
Owner has to pay all repair and maintenance costs of the property. Leaseholder may have to pay the repair cost
Complete ownership  Restrictions imposed or permission required 
Don’t pay additional costs Need to pay additional costs e.g. gym, car park, etc.
Easier to sell Usually takes more time to sell, usually, if the remaining lease is less than 80 yrs. 

 

As different as these property options are, the opinions on buying a freehold property and leasehold property are equally varying as both satisfy the needs of buyers as per their demands. Hence, it is imperative to list down your needs while buying a property, but it’s highly stressed to also consider your budget before making any real estate purchase.

No one can pass one of these both properties as a better option. It only comes down to your budget and needs.

Happy house hunting!

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