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If you own the freehold of your home, it implies that you own the structure and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the building or land and need to pay ground lease to the freeholder.
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Freehold vs leasehold: the key differences
Do you comprehend what is meant by a freehold or leasehold residential or commercial property? Experienced estate agent, Ian Harris helps explain the crucial differences.
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What does leasehold suggest?
You are acquiring a lease from the freeholder for the right to live in the residential or commercial property for a set number of years. You won't technically own the residential or commercial property outright, the freeholder (or landlord) will continue to own the residential or commercial property and the ground it sits on. Leasehold is prevalent when purchasing a flat or home as it sits within a bigger building.
The number of leasehold homes has nevertheless grown in the last few years, particularly with new builds that are sold straight through the designer.
Recent changes to the law
The Leasehold and Freehold Act 2024 is now law, but private parts of the Act are being implemented one at a time so not whatever has been done yet. You can see the progress of the modifications here. Eventually there will be a restriction on the sale of brand-new leasehold flats, making Commonhold the brand-new default period instead, where each unit-holder owns the freehold of their home.
Read more about what's changing for leasehold
Main things to know that have been carried out so far are:
- If you own a flat, you can now extend your lease without waiting 2 years first (as of January 2025).
- This suggests that more leaseholders in mixed-use structures can make an application for the right to manage