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2 major benefits of buying a leasehold

Friday, 18 March 2016

It can be very difficult getting on the property ladder and because of the expense involved many people choose to rent instead.

Becoming a leaseholder could be a better solution. In a previous article we explained the difference between buying a freehold and a leasehold; freehold is where you own the property and the land outright and leasehold is where you lease the property from the freeholder for a particular period of time.

However, if you are considering buying a leasehold property you should make sure that you choose a property with a long lease otherwise you can expect the value of your lease to quickly decline.

One advantage of buying leasehold compared to buying freehold is that it is considerably cheaper to buy a leasehold. Compared to renting a property, buying a leasehold means you own a lease that you can at least sell on in the future. However, there are other costs involved with a leasehold property such as ground rent (rent towards the cost of the land) and service charges which are set out in the contract between the leaseholder and freeholder. The vast majority of flats are available on a leasehold basis and people choosing to lease a property in a block of flats will usually only have to pay for a share of the ground rent.

Additionally, it is possible to get life time security by extending the leasehold of your property by up 999 years. Also, if you do find yourself in the position where you are able to buy the freehold to the property, new legislation has made it easier. However, the complex laws surrounding lease extensions and the legal process of purchasing the property outright from the freeholder means that you will need to instruct a property legal team to liaise with the freeholder. The knowledge and experience of a professional property legal team will be invaluable during the process.

At Rollingsons our enfranchisement team advises both leaseholders and freeholders on this specialist legal area and has a lot of experience with processing lease extensions, the purchase of freeholds and the purchase of blocks of flats by groups of leaseholders. For more information or to arrange an initial consultation, please contact us on 0207 7611 4848.

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