A simple guide to buying a leasehold property

If you have been considering to buy a flat then in most cases you are going to be purchasing a leasehold property because most of the flats are available in leasehold basis. But how does leasehold properties differ from the ones we are used to (freehold)? You are going to find out in this article.

What does leasehold actually mean?

Probably you have already heard about the leasehold properties but you are still not so sure about what it means. Leasehold mean that you get to own the property but you don’t get to own the land the building is built on. As complicated as it might sound, that’s what it means and it is not actually complicated as you might be tempted to think. The whole process works very simple, you purchase the building from the freeholder, you sign the necessary documents to transfer the ownership from the freeholder to you for a given time as agreed on the lease agreement (it could be 99 years or it could even be 999 years), you pay the amount of ground rent you are supposed to pay annually, pay the service charge that is stipulated on the contract and live on the property happily until your contract runs out. But is it always that simple? The answer is no, sometimes you are going to meet with a freeholder who is not very honest and you might be paying the service charge but he does not get to play his part of providing the maintenance services. Other times you are going to find yourself involved in a ground rent scandal where your landlord will be asking you for charges you did not expect. It is because of those risks and others that you must use the help of a solicitor when you are purchasing the leasehold property.