What is the difference between leasehold and freehold?

When you buy a property leasehold, you own it for a certain period of time, known as the lease. When the lease runs out, ownership of the property reverts back to the person who owns the land (the freeholder or landlord). This means that your purchase effectively ends after the lease ends and you are no longer entitled to the property, regardless of how much you paid.

With a leasehold property, you do not own the land the property is on, and if it’s a flat, you don’t own the lobby, corridors, stairs, roof, or the building itself either. All of this is owned by the freeholder, which means they are also responsible for maintaining the communal areas. Leaseholders will usually have to pay a service charge to cover maintenance costs. Some leaseholders can claim a “right to manage” if they want to take charge of this, however.

The freeholder is typically responsible for arranging building insurance, but not contents insurance, so you would have to look into getting the latter yourself if you want your possessions to be protected. Learn more about how buildings and contents cover work in our article Your essential guide to home insurance.

Flats in a block of flats are almost always leasehold properties, though it is possible to own them freehold as well, which we’ll cover later on.

Author: wpadmin

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