Recently, there has been an ongoing report of the very controversial Leasehold Scandal. But, what is exactly the difference between leasehold and freehold? And more importantly, which is better?
Freehold Purchases Explained
If your dream is to live in England for the rest of your life, and settle in a home in which you want your grandchildren to visit you, and not have many financial burdens, then this is the way to go. A freehold purchase means many things.
1. The house you buy is absolutely and completely yours.
2. The land your house stands on it is also completely yours for perpetuity meaning, forever.
3. You will not have to pay annual ground rent.
4. You can pretty much do as you please to your property and nobody can tell you otherwise.
That sounds like an amazing feeling. Knowing you own a piece of land, and it is completely up to you to decide what happens to it or what you build on it can feel pretty liberating and exciting.
Leasehold Purchases Explained
A leasehold purchase is quite different from the previous. The purchases are usually set for a long period of time, varying in length from 40 up to 999 years. Yeah, you read that right, 999 years. You might be asking yourself, why would anyone lease anything for 999 years? The simple answer is that essentially; this will remain yours until you perish.
A leasehold purchase of longer time is of more worth than shorter times. This is because the owner of the land, has responsibilities to the upkeep of the property, and the structure. So where does the Leasehold Scandal come in? Recently, the demand of homes for purchase has risen, and investors have started selling their leasehold homes, with many rules and regulations that are often unreasonable for buyers, including many charges, and regulations on pets and building on the properties.
If you are in the market for a home purchase, explore both options before you decide which is the best option for you, whether you pick freehold or leasehold, as long as you know you can comply, you’ll certainly be right.