There isn’t really a specific way to own a property however, it’s still important to know what are the differences each one has.
Freehold, owns the right to the land and the infrastructure being built. This has no terms or times and you own the property and the land it sits on.
Leasehold is another form of ownership wherein you own the property for an agreed timeframe. When buying a leasehold property, you need to consider service charge fees in order for the freeholder to maintain the place. Once your lease runs out the property goes back to the freeholder. The majority of flats in London are leasehold.
- Many lease periods differ and normal lengths are 99, 125 (usually for ex local authority) 500 and 999.
- It is the norm for mortgage lenders to specify that they want there to be at least a minimum of 50 years remaining once the mortgage term finishes (i.e. 75 years in total).
- lease lengths can be increased with an agreement from the Freeholder for a certain cost.
- Having service charges is the norm but it is not set in stone; there are blocks of flats that have separate managing agents specifically employed by the Freeholder.
- A Share of the Freehold is a situation when a Freeholder splits up his responsibility and allows the leaseholders to become directors of their own leasehold company.