Leasehold advice as figures show increase
A property expert is offering advice to property buyers after national figures showed that the number of properties built as ‘leasehold’ was on the increase.Leasehold means while the property changes hands, the land it stands on remains owned by the landlord, known as the freeholder. This means that at the end of a fixed term, often hundreds of years, the ownership of the property will revert back to the freeholder.
New figures from the Land Registry show that last year, leasehold properties made up 43 per cent of new build properties registered. This compares with just 22 per cent in 1996.Pamela Richmond, solicitor in the Residential Property team at Napthens solicitors, said the news makes it more important than ever to be aware of the difference between leasehold and freehold, and carry out relevant checks before buying a property.
She said: “When carrying out conveyancing for leasehold properties, particularly flats, there are a number of additional checks to carry out that wouldn’t be done normally.“First of all, it’s important to understand the outstanding term of the lease – an area where houses differ from flats quite considerably.
“Houses often have as much as a 999 year lease, with just a nominal fee imposed by the freehold owners. The owner of the home is effectively responsible for the property and usually only needs to worry about the lease when carrying out major changes such as building work to the property.“With flats, owners will usually pay service charges as well, so it’s important to check how much this is and what it covers, such as maintenance and repair of communal areas like stairs, lifts and heating.
“It’s also a good idea to check whether there is a ‘reserve fund’ as it’s fairly normal to build up a surplus to cover any unusual expenditure like leaking roofs.“There is nothing wrong with purchasing a leasehold property, it just means that there may be additional payments to budget for on top of a mortgage each month, and permission must be sought when carrying out certain building work. “Mortgage providers may also require a certain length of time left on the term of a lease, so it’s important to get all the facts with the help of a conveyancing solicitor before committing to anything.”