If you're looking to buy a property, you'll likely come across the terms "freehold" and "leasehold". While they both refer to different types of ownership, freehold is generally considered to be the preferred option. In this article, we'll explain what freehold means, the benefits and drawbacks of owning a freehold property, and how it differs from leasehold.
What is freehold?
Freehold is a type of property ownership where the buyer owns the property outright, including the land it's built on. This means they are responsible for the maintenance and repair of the property, as well as any external areas such as gardens or driveways. Freehold properties are typically houses, bungalows or flats, and are often more expensive than leasehold properties.
Freehold properties are usually registered with the Land Registry, which is a government department responsible for keeping records of land and property ownership in England and Wales. The Land Registry issues a title deed for each freehold property, which contains information about the property and the owner.
How does freehold differ from leasehold?
Leasehold is a type of property ownership where the buyer owns the property for a fixed period of time, usually between 99 and 125 years. The leaseholder has the right to live in the property and is responsible for maintaining the inside of the property. However, the land the property is built on remains the property of the freeholder, who is responsible for maintaining the exterior of the property and any communal areas.
One of the main differences between freehold and leasehold is that freehold properties do not have a lease. This means the owner of a freehold property has no time limit on their ownership and can pass it on to their heirs. In contrast, leasehold properties have a fixed term, after which the ownership reverts to the freeholder.
What are the benefits of owning a freehold property?
One of the main benefits of owning a freehold property is that you have complete control over the property and the land it's built on. You can make any alterations or improvements to the property without seeking permission from a landlord, as you would with a leasehold property.
Another benefit is that there are no ground rent or service charges to pay, which are common with leasehold properties. This means you have greater financial freedom and don't have to worry about paying extra fees on top of your mortgage.
What are the drawbacks of owning a freehold property?
While there are many benefits to owning a freehold property, there are also some drawbacks. For example, you are solely responsible for the maintenance and repair of the property, which can be expensive and time-consuming. This includes any structural issues, such as subsidence or roof repairs, which can be costly.
Another drawback is that you may have limited control over any shared areas, such as access roads or communal gardens. In some cases, there may be disputes with neighbours over the use of shared areas, which can be difficult to resolve without the help of a landlord or management company.
How do you know if a property is freehold or leasehold?
When you're looking to buy a property, it's important to know whether it's freehold or leasehold. You can usually find this information in the Title Register.
It's also worth noting that some properties may be sold as "virtual freehold", which means they are leasehold properties with a very long lease, typically 999 years. While this is not the same as owning a freehold property outright, it does offer many of the same benefits.
Summary
In summary, freehold is a type of property ownership where the buyer owns the property outright, including the land it's built on. Freehold properties offer many benefits, such as greater control over the property and no ground rent or service charges to pay. However, they also come with some drawbacks, such as the sole responsibility for maintenance and repair.
At Land Registry Online, we provide a fast and reliable service that allows you to obtain the information you need about your property quickly and easily. Our Title Register document is accurate and up-to-date, making it an essential tool for anyone looking to buy, sell, or remortgage a property. Simply select the desired documents, complete your details, and you will receive your documents by email within a few hours.
You may also be interested in: