When you’re on the exciting journey of buying a property, one of the pivotal decisions you’ll face is choosing between a leasehold and a freehold. This choice will shape your rights and responsibilities as a homeowner, so understanding the nuances is essential.

Let’s start with freehold. Owning a freehold means you have complete ownership of the property and the land it stands on, with no time limit on your ownership. This grants you full control, subject to planning laws, and makes you responsible for all maintenance and repairs. The freedom and stability of a freehold often lead to higher resale values and fewer legal complexities.

On the flip side, a leasehold means you own the property for a specified period, as outlined in the lease agreement, but not the land itself. Lease periods can be extensive, sometimes up to 999 years. However, once the lease expires, ownership reverts to the freeholder unless an extension is negotiated. Leaseholders typically pay ground rent and service charges for maintaining common areas, especially in larger complexes.

Leasehold properties may come with restrictions or require permissions from the freeholder for significant changes or selling. Extending a lease is a legal right for leaseholders, but it can be costly and impacts property value and mortgage options, especially if the lease is short.

If you’re leaning towards a leasehold, scrutinise the lease length, ground rent, service charges, and any restrictive clauses. Ensure the terms are favourable and sustainable for your future plans.

Understanding the distinction between leasehold and freehold is fundamental in determining your responsibilities, costs, and rights as a homeowner. This knowledge is key to choosing a property that aligns with your lifestyle and long-term goals. Remember, the type of ownership not only affects your daily life but also the future value and saleability of your property. And if you need guidance, we at Sawyer & Co are here to help you navigate these important decisions.