If you own the freehold of your home, it suggests 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 but not the structure or land and need to pay ground lease to the freeholder.
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Freehold vs leasehold: the crucial distinctions
Do you comprehend what is suggested by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris helps describe the essential distinctions.
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What does leasehold imply?
You are acquiring a lease from the freeholder for the right to reside in the residential or commercial property for a set variety of years. You won't technically own the residential or commercial property outright, the freeholder (or property owner) will continue to own the residential or commercial property and the ground it rests on. Leasehold is commonplace when buying a flat or apartment as it sits within a larger structure.
The variety of leasehold homes has actually nevertheless grown in recent years, specifically with new builds that are offered directly through the developer.
Recent modifications to the law
The Leasehold and Freehold Act 2024 is now law, however individual parts of the Act are being implemented one at a time so not whatever has actually been done yet. You can see the development of the modifications here. Eventually there will be a restriction on the sale of brand-new leasehold flats, making Commonhold the new default tenure rather, where each unit-holder owns the freehold of their home.
Read more about what's altering for leasehold
Main things to understand that have actually been implemented up until now are:
- If you own a flat, you can now extend your lease without waiting 2 years first (since January 2025).
- This means that more leaseholders in mixed-use buildings can get the right to handle