Freeholding is the act of having a freehold property. To understand the term in detail, you need to understand the various aspects of the freehold properties. In this post, we will cover the definition of a freehold property. Furthermore, we will also converse how it is different from other types of property ownership by comparing it with the leasehold properties. It can help you in eradicating all your doubts related to the term freeholding. Let’s proceed further!
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What Is Freehold Property? Definition
Freehold property is the estate that is free from the hold of any other entity except its owner. Therefore, the owner of a freehold property can utilize the property for any purpose he wants. However, it should come in compliance with the local regulations. A freehold property has several benefits. For instance, if you’re going to sell a freehold property, you won’t need consent from the state, reducing the tedious paperwork. This is the reason why these properties are costlier than the leasehold property.
What Is Leasehold Property?
The concept of leasehold is different from freeholding. In this type of estate ownership, you can own a property for a certain length of the lease agreement with the freeholder. When the lease duration ends, the freeholder gets the ownership back unless you extend the lease. If you own a leasehold flat or maisonette, you won’t have a stake in the building where the property lies. Similarly, if you have the leasehold ownership of an entire house, you won’t have the ownership of the land it sits on.
Difference between Freehold & Leasehold Properties
The below-given points can help you in making a comparative analysis between leasehold and freehold property:
- The ownership of the leasehold is usually for 99 or more years. Contrarily, the tenure of the owner is not fixed in case of freehold unless specified by the town planning department.
- In the case of the leasehold, you need permission from the state or governing authority. On the other hand, a freehold property owner can transfer the property without any restrictions.
- The owner of the freehold property has full control over the building and the land where it stands. However, you need to acquire the lease from the landlord with the freehold right on the property.
What Are The Advantages Of Freeholding?
Now that you have a fair idea about the freehold property, below are some main advantages that you can harvest:
Free From Additional Charges
Freeholding has its numerous advantages. Freeholds are often the houses that you can fully own. You don’t need to make any additional payments, such as service charges, ground rents, or admin fees. On the other hand, their things become chargeable in the case of the leasehold properties.
Transparency in Payments
When you purchase a freehold property, you know exactly what you are paying for. The payments are independent of any other owners, and you don’t need to make any further payments in the future.
Freeholding gives you the full ownership of a property, and you can do whatever you want. There are no limitations as in leasehold ownership of a property. You can keep pets, make the required modifications, or smoke. Furthermore, there are no time restrictions that can bother you.
Freeholding Is Permanent
In the case of leasehold, there is a huge possibility of expensive renewal. Besides, there remains a fear of shrinking value as the lease runs out. On the other hand, buying a freehold is permanent.
Is Freehold Property All Good?
After seeing several advantages of the freehold property, if you think it is all good, then you need to know about its major drawbacks:
- Freeholds are costlier as it gives you the complete ownership of the land and the property.
- Freeholds are often houses, and if you are trying to find a flat, then it can be a daunting task for you.
- If you are more comfortable living with a community or neighborhood, then leasehold property can be a better option for you. Bank finance is not possible if the tenure of the lease is less than 30 years.
Things You Need To Consider When Purchasing a Freehold Property
If you are planning to purchase the freeholding of a property, then you need to consider the below-given points in your mind:
- Make proper research of the property and any fees that might be linked to it.
- Get the property thoroughly assessed by an expert Chartered Surveyor for any updates, changes, or issues with the building or surrounding place.
- If you are purchasing the share of the freeholding, then you need to know about the repairs. Besides, you should know the relationship of the property with the other freeholders and how a decision is made for the property.
Keeping these points into consideration can help you to get the best freeholding property. To get more information posts, stay in touch with us!