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Is your property leasehold or freehold?

When you buy a property, the last thing on your mind will probably be the technical jargon which is on the documents. However, it is crucial that you understand whether your home is freehold or leasehold before you buy, as this could make a difference between owning your own home and having a landlord.

If you buy a freehold property, it means that you own the house and the land which it is built on, outright. However, if your property is leasehold, you just have a lease from the leaseholder, or landlord, permitting you to use the property for a specific number of years. In many cases, this could be hundreds of years, but occasionally it may be far less.

As a leaseholder, you may be able to negotiate with the freeholder and buy the lease, although this could be expensive. You will be expected to pay ground rent on a yearly basis, in addition to maintenance fees and service charges, which could all add up to a hefty sum each year. There are other restrictions generally in place by the freeholder, like whether you can own any pets at the property or sub-let. You may also require permission for any work which you have done to the property.

Most properties for sale are on a freehold basis, however, it is possible that the estate agent won’t point out if a property is leasehold. Some new builds may be on a leasehold basis, so it is important that you check.

Seeking advice from a CeMAP qualified mortgage adviser is often the best course of action, before buying a property.

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