One of the first challenges people face when buying a home is understanding the difference between leasehold and freehold. Fortunately, it is often easy to understand, but the benefits and value of different options are sometimes more difficult to understand.
Freehold
When you are a freeholder, you have absolute rights to the building and the land. No one else is claiming here, and you can do whatever you want within planning laws and regulations. This autonomy makes the freehold so attractive that there will be no additional or permanent costs to the owner once the property is purchased, and you can make changes to the property and land as long as you do not offend anyone in the planning department.
One downside to this freedom is that you take full responsibility for the costs or repairs required for the building, although when you rent if you live in a converted apartment or house, this bill will be paid to the tenant. Also, it's possible to secure leasehold contracts which last up to a thousand years when you compare a leasehold of this length with a freehold it's sometimes difficult to account for the additional cost that comes with a freehold property.
Leasehold
If you bought a house or apartment on a leasehold, you have the right to live in that house and apartment, not on the land. In some cases, the terms of the lease may change and alter what you can do with the building, but it is difficult to compare leases because some are more flexible than others.
The leasehold term is for a specified period; Most are over 75, and if yours is short, it can be difficult to get a mortgage from reputable lenders. Oftentimes, it is possible to negotiate a leasehold extension as part of the purchase, but be aware that this can result in additional costs.
Purchased a Leasehold Property
Also once you've purchased a leasehold property you can incur additional costs from the freeholders both as one-off events and ongoing charges. This may include land rental, service fees, and other management fees. Both options have advantages and disadvantages, but make sure you fully understand the advantages and disadvantages of both before making a final decision.