Quick Answer: Is Share Of Freehold Better Than Leasehold?

What is the benefit of owning a freehold?

The advantages of a freehold Freeholds are usually houses.

The advantage of a freehold property is that you have complete control over it, and are not subject to any further payments, like ground rents, service charges or admin fees, which can be the case with leasehold properties..

Can a freeholder refuse to extend a lease?

When buying a leasehold property, its value will depend on how many years are left on the lease. … If you have occupied the property for less than 2 years, the freeholder can refuse to extend the lease, but it is often possible to negotiate a lease extension even so, although you may have to pay more to do so.

Is a 99 year lease long enough?

The majority of residential leases used to be for a term of 99 years, but more recently leases on modern purpose-built flats have been for 125 years or longer. … The simple answer then is yes, there is no problem in principle in buying a flat with a short lease provided that its price reflects this fact.

What does share of freehold mean?

A: Buying a share of freehold means that you will acquire a shared ownership of the freehold title relating to the building, as well as a leasehold interest in the individual flat. Usually the freehold title is registered in the name of a company in which the flat owners will be shareholders.

How much value does share of freehold add?

For these reasons, buying the freehold may increase its value – by as much as 10 per cent according to estate agents – and make it easier to sell your home in the future. “Freeholders have more control over the management of their homes,” says a spokesman for the housing charity Shelter.

Does share of freehold still have a lease?

Owning the freehold (or a share of it) and leasehold It is important to recognise that the lease is not defunct. … The freeholder, now being the group of Leaseholders, still has to maintain the building in accordance with the leases and raise service charge demands.

Why is there a lease on share of freehold?

When you have a share of freehold property, the lease is very important if you wish to take out a mortgage on the property. The lender will require the flat to be defined and have its own title so that their charge can be registered against the property’s title.

Can you own both freehold and leasehold?

“Leasehold” is a land interest carved out of a freehold. … The leasehold interest can (usually) be sold. If the person who owns the freehold also ends up owning the leasehold, the distinction between the two is irrelevant, so the Land Registry will merge the two interests, and you’ll end up with just the freehold.

Is it worth buying share of freehold?

If you already had a decent length lease, eg, 999 or 99 years, buying a share of freehold will make little profit. You would still have to pay the same legal costs as someone with a short lease, but would only add a smidge to the flat’s value. Do ask estate agents, solicitors and surveyors how much value it could add.

How do I transfer share of freehold?

Contact the other registered owners If you are one of the registered owners of the freehold, there must be a formal deed to transfer ownership. This deed transfers ownership from all the existing owners (including yourself) to your buyer and the remaining existing owners.

How do I extend my lease on share of freehold?

If you are lucky enough to own a flat and a share of the freehold the good news is that the process of extending is relatively straightforward and the costs are fixed (and low). The first step is to agree this with the co-owners. You cannot usually act alone however extending the lease will benefit everyone.

Can I sell my share of freehold?

A freeholder can only refuse to sell the freehold if the qualifying requirements are not met. For example, leaseholders may ask if you will sell the freehold to them even if more than 50% of the leaseholders do not wish to participate. In this case, it would be entirely up to you whether you accept the sale or not.

What is a freehold management company?

A Freehold Management Company (“FMC”) is unique in bringing together flat-owners who share a building separated into individually owned and occupied units. … Generally, the day-to-day management of a company is delegated to the directors of that company, the shareholders do not often retain day-to-day management powers.

Do you pay service charge on share of freehold?

The share of your Freehold – Your Lease Without the lease, you would lose the covenants in it which allow you as freeholders to do such things as collect service charges. Ownership of the freehold does not affect the validity of the leases which will remain in place. You will be a joint freeholder AND a leaseholder.

Are freehold flats worth more?

Freehold is often more expensive than leasehold at the outset. Similarly, freehold often applies to houses rather than flats, so they are naturally more expensive.

Can I buy a share of freehold?

To buy your share of the freehold you will need to pay your flat’s share of: The purchase price for the freehold. The cost for a surveyor to do an accurate freehold valuation so you avoid paying over the odds. Legal fees for the leaseholders.

Is a maisonette freehold?

Freehold maisonette mortgages If you are buying the freehold of a maisonette, you own the property outright, including the land it’s built on. … However, it means that you don’t have to worry about paying ground rent, service charges or any other charges imposed by a freeholder.

What is the problem with a freehold flat?

The legal problem is that there is no automatic system of making the liabilities to pay monies run automatically with freehold land – this means that within the building your freehold flat is situated you are reliant upon your neighbour to maintain part of the structure such as the roof mains walls or foundations and …

Is a 999 year lease as good as freehold?

Newly-created leases can be anything from 99 or 125 years to 999 years. A 999 year lease is effectively as good as freehold, and there can even be some advantages to owning some properties this way, rather than under freehold (see below). However, shorter leases become problematic sooner than you may think.

Do you pay ground rent on a freehold property?

Property sales are either on a leasehold or freehold basis. When you buy a freehold property you own the property and the land it sits on. If your property is a leasehold property you’ll have to pay an annual charge, known as ground rent, to the person who owns the freehold.