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If you own the freehold of your home, it indicates 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 structure or land and should pay ground rent to the freeholder.
Freehold vs leasehold: the crucial distinctions
Do you understand what is meant by a freehold or leasehold residential or commercial property? Experienced estate agent, Ian Harris assists describe the essential distinctions.
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What does leasehold imply?
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 proprietor) will continue to own the residential or commercial property and the ground it sits on. Leasehold is commonplace when purchasing a flat or apartment or condo as it sits within a bigger structure.
The variety of leasehold houses has actually however grown in recent years, particularly with new builds that are offered directly through the designer.
Recent modifications to the law
The Leasehold and Freehold Act 2024 is now law, however individual parts of the Act are being executed 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 ban 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.
Learn more about what's changing for leasehold
Main point to understand that have actually 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 means that more leaseholders in mixed-use buildings can look for the right to handle