How do I know what type of ‘hold’ my property is?
Understanding the type of ‘hold’ a property has can hugely impact your buying, selling and investing decisions. Move Places’s guide walks you through the different types of ‘hold’ that exist and what it means for you.
What is freehold?
When you own a freehold property, you own the building, including the land it is on, outright and indefinitely. As a result, you are responsible for maintaining the building and land. Most houses are freehold, with the exception of some new builds or shared ownership properties.
What is leasehold?
With a leasehold property - usually a flat - you only own the property for the length of the lease, which is set by the freeholder. Leases usually run for more than 100 years although when leasehold properties come up for sale, their lease length can be much shorter. You can pay the freeholder to extend the lease but it can be a costly exercise. If you let your lease run out, your ownership ends too and the property returns to the freeholder.
The lease agreement sets out the legal rights and responsibilities of each party. The leaseholder maintains the inside of their property, whereas the freeholder is responsible for maintaining the external and common parts of the building, like the roof, external walls and communal entrance. A lease also sets out the fees and charges that the leaseholder must pay. Usually this includes ground rent, service charges, maintenance costs and a share of the building’s insurance.
What is flying freehold?
The term ‘flying freehold’ refers to a part of a property that lies beneath or hangs over another freehold property. Both parties would have a flying freehold where there is a room over a shared driveway or passageway, for example.
How can I find out what type of ‘hold’ a property is?
If you’re not sure of the hold, it’s possible to find out on the Government’s website. You just need to enter an address and it will display the hold information about that property. If you prefer, we’ll run the check for you - simply contact us.
Are there drawbacks to selling a leasehold property?
Many buyers will avoid leasehold properties altogether as they want outright ownership of the property and the land. They’ll also want to avoid the expense of extending the lease in the future, and may find the service charges and ground rent too costly. The conveyancing attached to a leasehold property is also more complex – taking extra time to complete and often costing more.
Are there drawbacks to buying a leasehold property?
If you’re thinking of buying a property with a lease, be aware that some mortgage companies will not lend against properties with less than 85 years remaining on the lease. It’s also worth factoring in that a leasehold property’s value can decrease with every year the lease length reduces.
Open markets sales
If you would like to sell a leasehold property on the open market, you will need an estate agent experienced in this type of sale. Move Places has successfully sold hundreds of leasehold properties, and we have purchasers actively looking for homes with short leases.
You can request a free valuation from us instantly, even if you don’t know the type of lease you have. Already with another agent? Ask us about switching agents to Move Places during your contract or at the end.
Call on a cash buyer
If your lease is so short that a mortgage lender wouldn’t consider a loan against it – putting off purchasers - a cash buyer may be your best option. Our sister company, Open Property Group, buys all types of leasehold properties, including short lease flats and new homes with troublesome leases. It can provide a guaranteed cash offer for your property, and offer you completion in as little as seven working days.