There is no doubt that purchasing your first home is both exciting and a little daunting. As a first-time buyer, you will not have been through the whole process before and may come across areas which leave you confused. A good example of this for many first-time buyers is whether the property you are looking at is freehold or leasehold. But what does this refer to and what is the difference between freehold and leasehold?
Freehold & Leasehold Property ExplainedIf the property you plan to buy is classed as freehold then you will own it and any land it is situated on outright. This is much different than a leasehold property where you are actually purchasing the lease of the property from the freehold owner for a set period. This can be anything up to 999 years! When the lease period is up, a new deal can be negotiated - if not then ownership returns to the freeholder.
As you may expect, there are some advantages and disadvantages to this type of property. One attractive feature for many new buyers is actually owning the home they buy outright and knowing it is theirs. Of course, you also will not have to worry about the lease running out and possibly not being able to extend it. Freehold properties also mean there is no landlord to deal with and can save you money on paying any service charges or ground rent.
Pros & Cons Of A Freehold Property
But what about the downsides? Perhaps the biggest one is that you will be responsible for maintaining the property. This could naturally incur significant costs over time. You will also be more tied into the property and have to sell it on first before you can move to somewhere else in the future.
With a leasehold property, the major benefit lies in not having responsibility for maintaining the building or land. This not only saves you the time and hassle of doing any work yourself but can also save you money. This type of ownership is less permanent and so can be appealing if you do not plan on staying in your first home for the long term.
What Are The Benefits & Drawbacks Of Leasehold Properties?
In terms of the drawbacks, you may actually prefer to own your new house or flat. You will also not have as much control with a leasehold property as the landlord must agree to any changes to the property first. Service charges can also be high in some leaseholds and you could end up with a difficult landlord to deal with if unlucky.
If you live in the Wisbech or March area, get in touch today for more advice on this subject. We are experts at helping first time buyers navigate the conveyancing process and all that it may involve, such as the difference between freehold and leasehold. With a reputation for a professional, personal service in the local area, we are the people to trust.
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