If you purchase a freehold property, you are purchasing the outright ownership of the property, including the land it is built on (although there are restrictions on the depth of the land beneath the property and the extent of the sky above). The owner of a freehold estate in land has no time limit to the period of ownership, and is responsible for maintaining the property and the land it stands on.
If you purchase a leasehold property, you are purchasing the property for a fixed term but not the land it is built on. You have an agreement with the owner of the freehold which sets out the terms of your ownership. The agreement is known as a lease.
Once the lease over the property expires, the ownership of the property reverts back to the freeholder, unless there has been an extension to the lease. Unlike freehold, the responsibility of maintaining the property is with the Landlord and not the leaseholder. However, the leaseholder will have to pay a regular rent and contribute to the costs of maintenance and upkeep of the building and insurance through a service charge payment.
For more information on Freehold and Leasehold or to get specialist legal advice chat to our residential or commercial property team on 01483 451 900, email us on sols@gordonsols.co.uk or make an online enquiry here.