WHAT DOES LEASEHOLD MEAN FOR YOU? Leasehold and freehold are very different, explains Chan Khangura from Whitegates.
THERE are 23.36 million properties in England and Wales - with 64 per cent occupied by the owner and the remaining 36 per cent rented out, either by a private landlord, local authority or housing association.
Before getting into the statistics, it would be wise to explain the difference between freehold and leasehold properties. When someone owns the freehold of a property they own it outright, including the land it is built on. Meanwhile, with a leasehold property the leaseholder owns the property for the length of their lease agreement. During that time, leaseholders must pay the person who owns land (the freeholder) ground rent and other fees. When the leasehold ends, ownership returns to the freeholder. Although the leaseholder can extend the lease or buy the freeholder out, there are rules and regulations with regards doing that.
Many assume that houses are freehold and flats are leasehold, but not necessarily. While many houses are indeed freehold, it's important to check as it's of course possible for them to be leasehold - usually through shared-ownership schemes.
In fact, more and more new homes builders are selling houses on a leasehold. The protection of the law afforded to leaseholders who own a flat is massive, but sadly lacking to leasehold houses sold privately.
Looking specifically at figures for Huddersfield, at the last count in the HD1 to HD4 post codes there were 51,971 properties. Since 1995, 38,883 properties in that area have changed hands and have been sold. Looking further at those 38,883 transactions across Huddersfield since 1995 - using data from the Land Registry and the conveyancer My Home Move - as much as 53.40 per cent of properties have been leasehold, which is significantly higher than the national average of 15 per cent.
There's also cause for concern when it comes to a few new homes builders. There has been a growing, yet small, trend for new-build houses to be sold as leasehold in recent years. While not all house builders use this model, those that do maintain it helps make developments financially viable.
The issue comes when builders then sell the freehold separately to an investment company without informing the lease holder, which they are legally entitled to do. The law states that in England and Wales, the "right of first refusal" to buy the freehold applies to the leaseholders of flats - in other words the freeholder must offer it to the leaseholders of all the flats of the building first. However, unfortunately, this law does not apply to the leaseholders of houses.
So, if you are buying a new home and it's a house - not a flat - make sure you check very carefully whether it's freehold or leasehold. If it is a leasehold, while you do have rights, they are not as strong as for those people buying a leasehold flat. Mistake the property and it could cost you thousands of pounds.
|Printer friendly Cite/link Email Feedback|
|Publication:||Huddersfield Daily Examiner (Huddersfield, England)|
|Date:||Jun 8, 2017|
|Previous Article:||'WAIT AND SEE' APPROACH OVER GENERAL ELECTION PAUSES MARKET; ELECTION BUSINESS.|
|Next Article:||SADDLE UP; This stunning character property has plenty of traditional features, while its roof terrace and games room makes it the perfect big-kids...|