Leasehold vs Freehold

[dannyjoseph]

What are the main differences between the two? Who would own a freehold if someone is buying a leasehold of a property?

[twiglet4frog]

freehold means that u own it, where as leasehold means someone else owns it but u are buying the right to live in it or run the business as if it were your own. Leashold is a form of rent of sorts. buying leasehold should be cheaper than freehold as u arent buying the full property!

[Mistopheles]

Flats are almost always leasehold. Imagine living in a block of flats, where the flat above you has a hole in the roof, which leaks onto your property. If it's a leasehold, you can force the owner to repair it.

If you buy leasehold, the freehold to a property can be owned by anyone - an individual, or even the council. It's doesn't affect you much, but you sometimes have to pay them a fee each year - it's often something daft like �3. You buy a lease for a set period of time, but this is nothing to worry about - it's often something like 100+ years. At the end of this time, you usually have the right to renew the lease for a fee.

Freehold is usually a little more expensive, but if buying a flat, expect it to be a leasehold. The only time to really avoid a leasehold is if there's not much left to run on it. If it only has a year left to run, you could have a problem at the end of that time.