When buying a property, it is important to know the difference between a freehold and leasehold title, this is essentially the two forms of legal ownership. If you own a freehold title, you are the sole owner of both the building and the land of a property. If you are a leasehold owner, you own the dwelling but not the land that it lays on and you are leasing the dwelling from the freeholder.
Whole houses are normally sold as freehold and a typical leasehold title is when a flat is purchased. The purchase must adhere to responsibilities attached to the land or dwelling in both freehold and leasehold titles such as maintaining the fabric of the building, roof and outside walls for freehold and contributing to ground rent and service charge for leasehold.
One of the most important aspects of leasehold title is the amount of term left on the lease, this can be long such as 999 years but can also be short. When the term time runs out, the ownership will return to the freeholder unless you can extend the lease so this is an important point to keep in mind. Whether you wish to buy a freehold or leasehold property make sure you instruct a solicitor or conveyancer to help you through the process and understand the legal consequences.
