Have you saved money to buy your property in London, UK, but are confused between leasehold and freehold property in London? 

Which would be more beneficial for you to buy?

Here, you will find a complete guide about the pros and cons of buying a leasehold and freehold property in London, UK.

Knowing the differences between leasehold and freehold is essential before prioritising any on the other. 

While living in the UK, your selection of leasehold or freehold makes a considerable impact in terms of cost, responsibilities, and maintenance. 

So, before going further, let’s discuss the terms of leasehold and freehold first. 

LEASEHOLD VS FREEHOLD

What Is A Leasehold Property?

A leasehold property means you will own the home but not the land on which it lies. You own the house for a certain period after paying rent. 

However, the absolute ownership belongs to the landlord, who leases the property for almost 40 to 120 years. 

New created leases can run from 99 or 125 years to 999 years. 

There are more disadvantages of owning a leasehold property than its potential benefits—however, the few benefits it offers cannot be neglected. 

After examining the freehold property, we will discuss the pros and cons of leasehold property. 

What Is A Freehold Property?

A freehold property belongs to the buyer, including the land on which the home is based. You own your freehold property until you decide to sell it. 

Owning a freehold property is simpler and more flexible than a leasehold. 

As a landlord, you will be responsible for the maintenance of your property and land. 

You are free to do anything after getting the planning permission from the local council. Whether you want to operate your business from home, want to have a pet, or renovate your kitchen or bathroom, you are only answerable to some. So, you will enjoy more perks if you own a freehold property. 

The Pros And Cons Of Buying Freehold Vs. Leasehold

Let us discuss the benefits and drawbacks of both freehold and leasehold. After that, we will finalise which one to own while living in London, UK.

Pros Of Buying A Leasehold Property

Some of the benefits of having a leasehold property are as follows;

Low Rates: A leasehold property is usually cheaper than a freehold because it is usually a risk to buy the leasehold as it has a lease limit.

No Need To Pay Building Insurance: If you have leasehold ownership, you will be relaxed because you don’t have to worry about maintenance costs and building insurance in the communal area. All these duties are to be filled by the landlord to whom the land belongs. 

Cons Of Buying A Leasehold Property

Generally, it is assumed that leasehold property offers more disadvantages than advantages. 

Lease Limit: One of the biggest flaws of leasehold ownership is that you own the property for a minimal period. 

You are also paying rent and must move from here sooner or later. 

If you want to sell your leasehold and its lease limit is quite close, it will decrease the leasehold price.

Rent To Be Paid: You must pay the landlord the rent and many other service charges. These charges can increase over time or after a limited period. And if you cannot clear the dues, you have to move from here, which can also be costly.

Permission Required: You need your landlord's written consent for every change you want to make to the property. Whether it be a renovation or a house extension, you need permission, which also costs you additional fees.

Several Restrictions To Be Faces: Whether you want to run a business from home or want to have your favourite pet, you are not allowed to do that. In short, the landlord must approve all your activities before you can pursue them.

Costly Conveyancing Fees: As we are all familiar with, conveyancing fees are about to be paid every time you buy or sell a house. But in the case of leasehold property, you have to pay the conveyancing fees in heavy amounts. The conveyancing fees cover the exchange contract’s cost and wherever it is required in buying or selling a house.

Pros Of Buying A Freehold Property

You may have the following privileges if you own the freehold property in London, UK. 

Independent Ownership: A freehold property allows complete freedom in your allotted property and land. You may renovate your house whenever you feel it is necessary. You can also think of house extensions or having pets. In short, you are entirely free to do whatever you want. 

No Rent To Be Paid: Once you own a freehold property, you do not have to pay the rent of the property and land, no service charges and admin fees to the landlord, because here the landlord is just you.

No Need To Track The Lease Limit: Unlike the leasehold, you do not have to keep track of the lease remaining time and are not supposed to pay any cost to increase the lease limit, which can be pretty costly.

Cons Of Buying A Freehold Property

Owning a freehold property seems quite exciting, but there are some drawbacks that you must consider before buying any freehold in London, UK. Some of the disadvantages of owning a freehold property are mentioned below;

Costly: Owning a freehold is quite expensive compared to a leasehold. Because you don’t have to pay the rent often and get the land with the house in return.

Fewer Property Options: Most freehold properties are available in the form of houses, and if you are looking for a flat, it will be challenging to find a freehold flat.

Responsibility to Upkeep: Unlike leasehold, you are responsible for the maintenance of the property. Whether it is a plumbing or electrical issue or an extension or renovation is required, it is the only you who is responsible for all types of maintenance and paying insurance. 

LOOKING FOR A TRUSTWORTHY ESTATE AGENTS IN LONDON, UK - CHOOSE CRIBS ESTATE

If you are confused between leasehold and freehold ownership, seek help from the Cribs’ team of professionals who are experts in choosing the right housing option for you per your needs and requirements. 

As mentioned above, the guideline will help you understand the pros and cons of buying a leasehold and freehold ownership in London, UK.

Both leasehold and freehold ownership have positive and negative points, but purchasing a freehold is always recommended as it gives you complete freedom to do whatever you want. You are not bound to the landlord’s likes or dislikes in maintaining your house; your property remains valuable even after years of buying it because the land belongs to you. You can renovate your home or extend it whenever you consider it essential. 

However, leaseholds obligate you to seek the landlord’s approval before doing any activity, ultimately costing you money and time. 

If you want to enquire more about the leasehold or freehold ownership, feel free to contact us immediately at +44 2034 4115 71 or info@cribsestates.co.uk. Our professionals with years of experience will guide you in buying and selling leasehold and freehold property in London, UK.