Leasehold vs Freehold - what is the difference?

Описание: When it comes to property what is leasehold and what is freehold? In this video I explain them in more detail.

Transcript:

Hi everyone. Welcome to my channel. My name is Zita Latham I am senior mortgage broker and protection advisor at The Mortgage Mum. Today's episode is about leasehold and freehold properties. Very, very important that when you start looking for a property, you're very, very clear on these terms and what is the big difference between buying a leasehold and a freehold property? So, when the main difference or the difference between leasehold and freehold is in terms of the freehold property, you own the property and the land outright when you purchase it. However, when you buy a leasehold property, you only own the property for a number of years. There's a length of lease attached to it. So it's a big difference between the two. When you start viewing properties and you identify that, most likely you will be buying a leasehold property, generally speaking, it comes down to budget. Freehold properties, generally speaking, are more expensive than leasehold. So, if you can only afford buying a leasehold property, that is absolutely fine. Nothing to worry about. But you need to just check certain things with the estate agent and also your conveyancer will check various things before you complete and before you're happy to buy that flat or leasehold property. Generally speaking, I said flat. Most of the time, flats are leasehold, but sometimes houses can be also free leasehold properties. So, when you start viewing properties, always ask the agent, unless it's in the advertisement, how long is the lease, how much is the service charge, how much is the ground rent, and whether they are aware of any increases in terms of the ground rent or service charge in the coming years. And if the lease length of lease is under 80 years, that's when it might get slightly tricky. You might still be able to get a mortgage on a property with less than 80 years on it, but lenders have restrictions how many years you have to have left on that lease. But I think what is really important, that even if the lender will give you a mortgage, how the resale ability will be impacted on that property if the lease is shorter? And also if you had to lengthen that lease, how much it will cost you. So, shorter the lease, it's more likely that you have to extend that lease and that will be costing you money, your legal representative, your conveyancer will check certain things as well about the lease. They are going to check restrictions on the lease terms and conditions. For example, in some cases you can't have any pets in the flat, for example. They will check how the ground rent might change and in what scale it might increase. They will also have to check whether the lender is happy with this. When you pay ground rent service charge, for example, the service charge is towards maintenance, cleaning common areas, often buildings insurance included in this figure as well. And that is paid obviously the landlord or the management company. Yes. So basically the most important thing is that your legal representative check everything what they need to check in terms of the lease. And you need to consider all the information they provide you regarding this to make sure you're happy to purchase the property because there are more checks to carry out when it comes to the leasehold property purchasing a leasehold will most likely will take longer than if you purchased a freehold property. So just a few extra bits of information to be mindful of when you buy a leasehold. But it is absolutely fine to buy one. Just be aware of restrictions and costs which of course your conveyancer will also check for you. Well, I wish you all the best and lots of luck with the property purchase. And please check out my other videos in my channel as you find lots and lots of useful information there.

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Zita Latham Mortgages Limited is an appointed representative of Mortgage Intelligence Ltd which is authorised and regulated by the Financial Conduct Authority under number 305330 in respect of mortgage, insurance and consumer credit mediation activities only. Registered address: Zita Latham Mortgages Limited, 45 Nork Way, Banstead, Surrey SM7 1PB. Registered in England & Wales under number 13666781

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