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Buying a house - Leasehold & Freehold

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    Buying a house - Leasehold & Freehold

    I looked on wikipedia but was not left feeling much clearer on what exactly a leasehold entails. I thought most UK houses were freeholds i.e. you own the property outright when you buy it... how is a leasehold different, and does it make a big difference in terms of 'real life'?

    Thanks.
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    #2
    One of the dubious benefits of being on the bench is that you get to see all the property programs (and Diagnosis Murder ))
    As I understand it, with a freehold house you own it and the land it sits on. With a leasehold house somebody else owns the land and you pay for using it.
    I don't think leasehold houses are common so - depending on the length of the remaining lease - you could have problems when you come to sell it.
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      #3
      Originally posted by d000hg View Post
      i.e. you own the property outright when you buy it... how is a leasehold different, and does it make a big difference in terms of 'real life'?
      Freehold = you own the land the property stands on

      Leasehold = you don't

      Depending on the terms of your leaase you can get stung by the freeholder for various things at their discretion - a common problem with building repairs, service charges etc. in blocks of flats and conversions.

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        #4
        Who gets the land after the leasehold runs out? The state maybe?

        I don't know how the English put up with the property system as it stands. We put in an offer on a place and that is a legal bind, when you place your money down that is it. It is your property.

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          #5
          Originally posted by minestrone View Post
          Who gets the land after the leasehold runs out? The state maybe?
          The leaseholder. They own the land.
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            #6
            Originally posted by Zippy View Post
            The leaseholder. They own the land.
            So is there a definable person/company/entity that owns the land? Is that defined on the contract of sale?

            Just seems strange to me that someone/something would hold land with the propect of getting it back in 100 years.

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              #7
              Many houses in London are leasehold- eg the ones the Duke of Westminster owns.

              With leasehold, you never own the property outright, you get to live there until either the lease runs out (could be up to 999 years or a lot less) or you renegotiate an extension to said lease.

              Many apartments are leasehold and this is common as there are a lot of shared services, etc used by more than one dwelling.

              You still need to pay for the upkeep of a leasehold propety so it is not like renting from a Landlord etc.

              You will also often have to pay ground rent to the lease owner on top of maintenance and service charges. There are often quite restrictive covenants on leasehold property, so you cant go ahead and put up an extension etc without agreement of the property owner. So leashold is not like being the freeholder either.

              Personally, I would only buy a leasehold property if it was the only option available in an area that I wanted to live in (eg Central London again).

              There are a lot of complex laws on leaseholds and it is a very specialized area, so take advice from a lawyer who knows about this before entering into any agreements.

              PZZ
              Last edited by pzz76077; 8 November 2009, 19:06.

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                #8
                Originally posted by pzz76077 View Post
                Personally, I would only buy a leasehold property if it was the only option available in an area that I wanted to live in (eg Central London again).
                Why would you have a choice when one option was only available?

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                  #9
                  Leasehold is basically a long term rent - such that you can often sell it on to someone else (although it may require the leaseholder's approval of the buyer). The value of the lease is largely determined by how long you have left.

                  Many businesess 'rent' properties on leasehold - less common for residential properties though, although a lot of church-related properties are provided on leasehold, so they remain the ultimate owner.
                  Last edited by centurian; 8 November 2009, 19:22.

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                    #10
                    I thought most leaseholds were reset to 999 years at sale effectively negating any ownership issues with the leaseholder.

                    However this is still a contentious point with lenders who prefer to see freehold when lending on a house. Conversely they don't like to see flats with freehold as responsibilities can be a problem.
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