Freehold Vs Leasehold
When you’re buying a house, the main decision to make is whether to buy freehold or leasehold. The key difference is that when you buy freehold, you own the land and property it sits on, rather than just the house itself.
In the case of a leasehold, on the other hand, you only own the part that is included in the lease. This is usually the land itself, although in some cases, there may be rights over common parts or other land that the freeholder retains.
A lot of people choose freehold properties to invest in as they tend to have a higher rental yield than leaseholds and also have a greater potential for capital growth. However, they are often more expensive than leaseholds and therefore a property owner needs to decide which is better for their own situation.
Freehold Vs Leasehold – Which is Better?
The biggest difference between the two types of ownership is that a leasehold only lasts for a fixed period. This means that the property owner can only sell their property once the lease has come to an end. It is possible to extend the leasehold to a maximum of 999 years, but this can cost a significant amount.
Another major difference between the 2 types of property is that a freehold has more freedom over alterations and subletting than a leasehold does. The freehold owner can change the property in any way they see fit, provided that they follow the regulations set out by their local council.
Some freehold owners also have the ability to sell their property at a higher value than leasehold owners because they don’t have to worry about a time band. This is a big benefit for many property investors and can be a good way to get more money back when it comes time to sell the property.
If you’re unsure which type of ownership is best for you, talk to a specialist who can explain the different options and help you make an informed decision. They can also provide information about the costs involved and the associated fees.
A freehold is a much better option if you want to own your home for a long time, because it gives you total ownership over the land and house it’s on. This makes it easier to keep a freehold property in tip-top condition.
There are also a number of other benefits to owning a freehold, including the fact that it’s easier to rent out the property and you can take out a mortgage on your freehold, as opposed to a leasehold which only has a fixed term. You also don’t have to worry about paying ground rent or service charges, which are common with leaseholds.
Generally speaking, leaseholds can be less expensive than freeholds and are often cheaper than buying new build properties with a freehold on them. This can be especially helpful if you’re on a budget or if your mortgage lender limits the amount of money that you can borrow.
