Understanding the difference between Freehold and Leasehold when purchasing a property can be confusing, but Attwells Solicitors are here to help.
What is Freehold?
A key aspect of a freehold property is that the buyer owns both the property and the land it is built on, including any outdoor spaces. If you are purchasing a house (with a mortgage), it is likely to be a freehold property, meaning it remains under your ownership until you decide to sell. As the owner of a freehold property, you are responsible for maintaining the garden and the property itself. There are no ground rents or service charges to pay, and no leases to consider. Additionally, you have the option to remortgage a freehold property.
What is Leasehold?
With a leasehold property, you own the property but not the building or the land it is on. You purchase a lease from the freeholder, granting you the right to live on the land for a set number of years. For example, if you are purchasing a flat, you own the property (the flat itself) but not the land, such as the apartment block and the ground it sits on. In this case, you are likely to pay the freeholder a monthly or yearly fee to cover the costs of maintaining the land.
Leasehold properties often have time limits, meaning you may need to renew the lease after a certain number of years. Additionally, there may be restrictions, such as needing permission for certain changes, like owning pets or undertaking building work.
Another example of a leasehold arrangement is a company renting space in an office building. They may own the floor where they operate but not the building or the land on which it stands.
Does a Leasehold Take Longer to Purchase Than a Freehold Property?
In general, the legal paperwork and completion timeline for a leasehold property typically take around three to four weeks longer than for a freehold. This is often due to the sale involving additional checks and leases, which can affect the asking price, mortgage rates, and generally slow down the conveyancing process.
Chris Salmon of Quittance Legal Services states that “Freehold sales take around six to ten weeks, while leasehold sales take approximately eight to twelve weeks to complete.”
How Can Attwells Help?
If you are a first-time buyer or thinking about purchasing a property and have any further questions about this matter or your conveyancing as a whole, don’t hesitate to contact us on 01473 229200. We will be happy to offer advice, talk you through the process for each type of ownership, and answer any questions you may have.
Our blogs and articles are correct at the time of writing.
These have been created for marketing purposes only and should not be considered as legal advice.
