What is Leasehold Property? Everything You Need To Know

Are you looking to purchase a property, but the term "leasehold property" has left you feeling a bit uncertain? Well, you're not alone. Leasehold ownership can be confusing, but it's essential to understand what it means before investing in a property.

A leasehold property is generally an ownership where you purchase the right to occupy and use the property for a fixed time. However, unlike freehold properties, you don't own the land outright, so you lease it from the freeholder.

In this blog post, we will explore leasehold ownership in more detail, discussing its advantages, disadvantages, and everything else you need to know before making a decision.

What is Leasehold Property?

Let’s begin with understanding the meaning of leasehold property.

Leasehold property is a type of ownership where you purchase the right to use a property for a fixed period of time. In this type of ownership, the land is not owned by the buyer but is instead leased from the freeholder. It means you have the right to occupy and use the property, subject to certain conditions, but do not own the land.

Leasehold Property Features & Overview

Now that we have clarity on the meaning of leasehold property, let’s take a look at the key features of leasehold properties:

• Leasehold ownership means you purchase the right to use a property for a fixed period
• The length of the lease is generally from 25-30 years
• The land is leased from the freeholder, meaning you don't own it outright
• Leasehold ownership is common for flats, apartments, and commercial properties
• The lease agreement outlines conditions and restrictions for using the property
• The freeholder is responsible for maintaining the building structure and common areas
• Ground rent and service charges may be payable to the freeholder

Advantages and Disadvantages of Leasehold Property

Leasehold ownership is an excellent way of owning property that has its own set of advantages and disadvantages. Here's a table to help you understand both aspects of leasehold property:

Most importantly, leasehold ownership makes it easier to obtain a secure loan from NBFCs like Hero FinCorp.

Also, let's have a look at the table below to get a better understanding of the difference between freehold and leasehold:

What Home Buyers of Leasehold Properties Can Do?

If you are buying a leasehold property, there are several things you can do to protect your investment.

1. Firstly, read the lease carefully and understand your rights and responsibilities.
2. Secondly, ensure you have a reliable and experienced lawyer who can advise you throughout the process.
3. Thirdly, consider buying the freehold or extending the lease if possible.