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Freehold/leasehold tenure
Freehold property is when the owner or borrower owns both the property and the land on which it stands.
Leasehold property means that the borrower owns the property (usually a flat) but not the land. The leaseholder will in effect be a tenant of the freeholder with rent payable from the leaseholder to the freeholder. This is usually called Ground Rent and is generally payable on an annual or six monthly basis. Details of the Ground Rent payable will be contained in the lease together with all the rights and obligations of each of the parties. There may also be maintenance charges relating to cleaning and gardening etc. When considering purchasing a leasehold property it is good practice to see a copy of the lease upfront to ensure that there are sufficient but not excessive provisions for the upkeep of the property.
Most houses and bungalows are freehold with flats and maisonettes more commonly known as leasehold. However you can get freehold flats and leasehold houses so check the Sales Particulars for any prospective property you are considering.
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