Are you considering buying a property but unsure whether you should go for a leasehold or a freehold? Understanding the differences between the two is important so you can make an informed decision that suits your needs and budget.
Leasehold property
When you purchase a leasehold property, you own the right to occupy the property for a fixed term, typically 99 to 125 years. However, you do not own the land the property is built on. Instead, you pay ground rent and service charges to the freeholder, who owns the land and is responsible for maintaining the communal areas of the building.
Leasehold properties are often flats or apartments but can also be houses. When you buy a leasehold property, you must abide by specific rules and regulations set out in the lease, such as restrictions on modifications you can make to the property and limitations on subletting or selling the property.
One advantage of leasehold properties is that they are often cheaper than freehold properties, making them more accessible for first-time buyers. They can also be easier to maintain, as the freeholder is responsible for maintaining the communal areas, such as the roof and exterior walls.
Freehold property
When you purchase a freehold property, you own both the property and the land it is built on, giving you complete control over the property. There is no ground rent or service charge to pay, and you are responsible for all maintenance and repairs to the property and the land.
Freehold properties are often houses but can also be flats or apartments. When you buy a freehold property, you have greater freedom to modify the property and sell it whenever you wish without obtaining permission from a freeholder.
One disadvantage of freehold properties is that they are often more expensive than leasehold properties, making them less accessible for first-time buyers. They can also be more challenging to maintain, as you are responsible for all maintenance and repairs to the property and the land.
Which one should you choose?
Choosing between leasehold and freehold properties depends on your circumstances, preferences, and budget. If you are looking for a cheaper and easier-to-maintain option, a leasehold property may be suitable for you. However, if you want complete control over your property and are willing to pay more for it, a freehold property may be a better option.
At Winfields Block Management, we have extensive experience managing leasehold and freehold properties. Contact us today to learn more about our property management services and how we can help you make the most out of your investment.
