Are there any benefits to having a share of freehold? In short, yes. Having a share of freehold gives you greater control over things such as maintenance obligations which removes the possibility of being taken for a ride by an unscrupulous landlord.
The obvious advantage of having a share in the freehold is that it gives the flat-owner a direct say in what happens on his block or estate. In some (but not all) circumstances, owning a share in the freehold may include valuable additional rights such as the right to a lease extension for nominal consideration.
There can be real challenges. Having flat owners with shares in the freehold can at times lead to deadlock over crucial decisions such as to whether to incur large service charge bills on major works. In effect, disputes which would have been between leaseholders and landlords become disputes between neighbours.
Share of freehold could also add value to your property if you feel that the building will be better run as a result. A well-managed and maintained building can add value to every property within it.
The price of a share of freehold flat could well be higher than a leasehold one, but any difference is likely to be relatively small unless a leasehold flat has a short lease remaining. This would come from the fact that leaseholds dwindle over the years and so the nearer they get to the end, the less they are worth.
Do freeholders pay ground rent?
Benefits of having a freehold
deal with the freeholder (often known as the landlord) pay ground rent, services charges or any other landlord charges.
What is the problem with a freehold flat?
The legal problem is that there is no automatic system of making the liabilities to pay monies run automatically with freehold land – this means that within the building your freehold flat is situated you are reliant upon your neighbour to maintain part of the structure such as the roof mains walls or foundations and …
Does buying freehold increase property value?
Purchasing the freehold can also add value to your home, especially if your lease is running short. … But a freeholder will have more control, and a better-managed estate could increase the value of the property.
Do freeholders have to pay service charges?
In a private estate, it is common that the homeowners of freehold properties must pay a contribution for the upkeep of the communal areas on the estate. … Estate charges or service charges payable by freeholds, are governed by The Rentcharges Act 1977.
Can you own both freehold and leasehold?
The leasehold interest can (usually) be sold. If the person who owns the freehold also ends up owning the leasehold, the distinction between the two is irrelevant, so the Land Registry will merge the two interests, and you’ll end up with just the freehold.
A: Buying a share of freehold means that you will acquire a shared ownership of the freehold title relating to the building, as well as a leasehold interest in the individual flat. Usually the freehold title is registered in the name of a company in which the flat owners will be shareholders.
Whether leasehold or share of freehold, it’s possible to mortgage a flat, just as you would a house. But there’s usually a few more considerations around making sure a flat is suitable for a mortgage and criteria will vary from lender to lender.