Ownership of a property

If you’re looking to buy it is important to consider the ownership of a property and the implications this has on you buying it.

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There are two types of ownership of property:

• Freehold 

– Leasehold
– Freehold

Owning a property on a freehold basis is the more advantageous of the two options, this inevitably impacts on the value resulting in them fetching a greater asking price than a leasehold property. The main reason for this being that ownership of a freehold property means you own the property in full and the land on which it is built.

Although this does hold you responsible for any repairs or maintenance on both land and property, you are at your liberty as to whether you make them or not. However as the land can be passed on to your family upon your departure, it probably makes more sense to keep it all in order.

Apart from this the only other potential hiccups with owning a freehold property is local planning or property laws in the area. Something that you should consider discussing with your solicitor before purchasing a property.


With a leasehold property you purchase the building but not the land it stands on, meaning the freeholder of the land still has ultimate ownership. When you purchase a leasehold property you do so for a fixed number of years and once this has expired, the ownership of the property passes back to the possession of the freeholder. As the clock ticks towards the lease expiry date, the price of the property also drops in value, increasing the difficulty of sale and decreasing the price achieved.

This is, in part, due to many mortgages only being available in certain time thresholds, say 60 years. If there is less than 60 years remaining on the lease it is unlikely a buyer will be able to secure a mortgage, decreasing the asking price of the house as a result.

On top of this anyone looking to buy a leasehold property is unable to renegotiate a lease until they have lived at the property for two years.

Any lease below 80 years can be a real problem and prove costly to extend, anything below 60 should be avoided all together. Don’t rely on your solicitor to check this for you as they can often neglect the task.

Another drawback of a leasehold property is that the buyer is essentially at the mercy of the freeholder and any changes or charges they wish to apply to the property. There is almost always a management or maintenance fee applied, often on a yearly basis, and any buyer wishing to make changes or improvements to the property can only do so with the consent of the freeholder.

How long should a lease be? 

There is no real answer to how long a lease should be but generally the longer it is the better. The trick to looking for a good leasehold property is finding one that is unlikely to reach below the 100 year mark during the time you plan to spend there.

It SHOULD NOT be anything less than 80 years. Once it drops lower than this, it becomes increasingly more difficult and costly to renew and almost impossible to get a mortgage.

Extending a lease 

When extending the lease there are a few routes to consider:-

– Buying the property and after two years you are able to apply for a lease extension

– Ask the current vendor of the property to consider extending it for you before they leave

– More informally you can discuss an extension with the freeholder of the property.

Should you find yourself in a dispute over charges or changes to your leasehold property or you can’t come to an agreement with the freeholder over an extension then the Leasehold Advisory Service can help.

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