Homebuying Terms - Leasehold or Freehold?
Young homebuyers in the dark on homebuying basics
Expert advice from James Molloy
“Our research suggests that many homebuyers are so desperate to get on to the property ladder that they may be overlooking vitally important basic legal principals. For years, the legal community has not helped much in terms of engaging the public on legal aspects of homebuying, something AA Legal Service intends to put right - by helping the public understand legal issues in plain English, we aim to help people make informed home buying decisions and feel in control of the process.”
The AA Legal Lowdown
- Freehold – The definition of freehold is the entitlement to hold a property with a perpetual right. There is no limit of time to hold the property like in the case of leasehold property. A freehold property lies with the title holder unless they transfer it of their own accord.
- Leasehold – The definition of leasehold is the right to hold or use the property for a fixed period of time at a given price, without transfer of ownership, on the basis of a lease contract. A leasehold is a fixed asset.
- If You Are Not Sure, Ask Your Solicitor – If you have any concerns, bring them up with your solicitor before you sign a contract.
Safe as Houses Facts
- More than two in five first time property buyers don’t know the difference between leasehold and freehold property.
- One fifth of UK adults do not know what a freehold mortgage is.
- 43% of young homebuyers do not know what the term leasehold means.