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Leasehold is an accounting term for an asset being leased. The asset is typically property such as a building or space in a building. The lessee contracts with the lessor for the right to use the property in exchange for a series of scheduled payments over the term of the lease.
If your property is a leasehold property you'll have to pay an annual charge, known as ground rent, to the person who owns the freehold. The solicitor who helped you purchase the property will be able to explain if the property is a leasehold or freehold property. Apartment buildings are often sold as leaseholds.
Leasehold property is land held under a lease for a specific period of time e.g. five years. You pay an annual rent which, depending on the length of the lease, may be subject to review. At the end of the lease (see 11 below) you give the property back to the landlord.
If your property is a leasehold property you'll have to pay an annual charge, known as ground rent, to the person who owns the freehold. The solicitor who helped you purchase the property will be able to explain if the property is a leasehold or freehold property. Apartment buildings are often sold as leaseholds.
Renting out your leasehold property. If you let out your leasehold property to someone else and charge them rent, this is known as subletting. If you sublet your property, your lease and the Leaseholders' Rules and Regulations require you to tell us within four weeks of the date you have started to sublet.
Well in theory when the lease expires then you don't own anything anymore- that's it, you have to move out and the freeholder can sell a new lease to someone else. I think most people tend to extend the lease once it starts to get below 60 or 70 years, if they can afford it.
Leasehold means that you own the property, but the land upon which the property is built is owned by the freeholder. This gives you the right to occupy the property for as long as the lease is valid. Freehold, on the other hand, means that you own the property and the land upon which the property stands.
In summary, it is acceptable to purchase a leasehold home, as long as you are careful with what you are buying. In most cases, the long length of the lease, combined with your legal right to renew your lease, will mean that your interest in the property is satisfactory.
When you buy freehold, you own both the building and the land it's standing on outright. When you buy leasehold, you own the building but only lease the land from the freeholder (or landlord) for a specific time and must pay ground rent and possibly service charges annually on that land.
Thanks to the Leasehold Reform under the Housing and Urban Development Act 1993, leaseholders who meet a certain set of criteria can buy the freehold together. If the freeholder is happy to sell, the leaseholders can buy the freehold from them.
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