Everything you need to know about leasehold
Published by Together on 10th February 2020 -
Leasehold is one
If your property is leasehold, you (the ‘leaseholder’) have a contract (‘lease’) with the landlord (the ‘freeholder’).
It’s important to understand leasehold when you’re buying, as an estate agent may try to gloss over it.
When you buy a
How long is a lease?
The vendor should be able to tell you how long the lease is. When buying a leasehold property, you want to ensure it is
Leases are typically
Mortgage providers will often insist that there’s a long-term lease agreement in place
What does owning a leasehold property mean?
In short, there are likely to be some extra costs you need to take into account.
You need to factor the extra cost of the ground rent into your sums when calculating whether you can afford your repayments. This is because you won’t own the land
You’ll also have to cover the cost of a service charge. Included may be the cost of Buildings Insurance, which the
In addition, you may have to pay into a reserve fund. Flat-buyers often find themselves affected by this, to cover the cost of (for instance) unexpected repairs to communal spaces. If you then
Why are some properties leasehold?
There are several
Many flats are leasehold, because the freeholder is typically responsible for repairs to shared parts of the building, like the roof. This ensures that no single owner
Some houses are leasehold because owning freehold can be a long-term source of income for landowners. Some have therefore offered their land to housing developers
Ground rent is often reasonable
That means a house bought in 2017 with a ground rent of £500/year could
Houses with doubling ground rent clauses in their leases can therefore be difficult to sell on, or hard to mortgage. Your conveyancer should flag any such clause in the lease before you exchange contracts, if you
How to extend your lease
You can ask the landlord to extend your lease, and this can add thousands to the sale price of your property.
Lease extensions are typically 90 years on a flat, or 50 years on a house. It depends if you qualify.
Alternatively, you may
You can negotiate this directly with the freeholder, or