Buying a leasehold property
With a freehold you normally own the property and the land it stands on outright. With a leasehold you own the right to occupy the property for the remaining term of a lease, subject to its conditions and usually contributions towards shared costs.
Very. A shorter lease can affect value, mortgage availability and the eventual cost of extending it. Do not look only at the current sale price; ask your solicitor and lender about the lease term before becoming committed.
Service charges are payments towards the cost of managing, maintaining and repairing shared parts of a building or estate and, often, insuring the building. Check recent accounts, the current budget and whether significant expenditure is anticipated.
It is money collected from leaseholders and held towards future major expenditure, such as roof repairs or external works. A healthy reserve fund can reduce the need for large one-off demands, although the arrangements depend on the particular lease and management structure.
It usually means the flat is still held under a lease, but the owner also has an interest in the company or arrangement that owns the freehold. This can give leaseholders greater control, but it does not remove the need to understand the lease and management obligations.
Check the lease length, service charges, reserve funds, management arrangements, insurance, restrictions and any planned major works. Your solicitor should review the lease carefully but ask for headline information early so that obvious issues are identified before you incur too much expense.
