When you are ready to buy your first home, there is a lot to think about. One of the most important things is to fully understand what you are buying and what is involved.
The main difference
In England and Wales, flats are commonly leasehold; therefore, if you are looking for a flat, you may not have much choice. There are also some houses that are leasehold, which is becoming more common with new-builds; however, the HomeOwners Alliance says that leasehold houses are unnecessary.
In essence, if you own a freehold property, you own it all – the land and the building – and you are responsible for everything. If you own a leasehold property, you pay fees in the form of ground rent and maintenance and service charges to the freeholder; in return, they are responsible for the maintenance and upkeep of the communal parts of the building. Your solicitor will be able to help you with this. Remember that cheap solicitors do not necessarily mean poor service, as they often have more modern processes.
If you live in a leasehold property, you may not be able to keep pets or sublet. You may also need permission to do major internal works, so check the lease carefully before you buy. Again, find cheap solicitors to assist with this.
You should check the length of the remaining lease before you buy. If you buy a property with less than 80 years remaining on the lease, it is harder to sell it on and the value of the property diminishes the shorter the lease. You may be able to negotiate with the freeholder to extend the lease; however, this can be expensive. Cheap solicitors can advise how you can keep your costs down.
Why buy leasehold?
If you are just starting on the property ladder, you will probably be looking for somewhere cheaper. This may well mean a flat, in which case you don’t have a great deal of choice. Leasehold properties are a good way to get started and you will become aware of the maintenance that is required for the property without the responsibility, so you can ease yourself into it.
Ultimately, it is your choice and your responsibility. Even with legal advice, make sure that you read the documents carefully.