Leasehold explained and Mortgage help available from Shire Direct!
Leasehold is one of the two basic types of property ownership in England and Wales, the other type being Freehold.
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Here we investigate Leasehold property ownership and how it works, together with details of how we can help with a Mortgage on a leasehold property.
Table of Contents:
What is Leasehold? A definition and explanation...
So, as we touched upon above, Leasehold is one of two different types of property ownership within England and Wales.
The other type is Freehold ownership. Your property must either be Leasehold or Freehold. The legal possession of land and property is known as Tenure.
If your property is Leasehold, you own the property for as long as is specified in the lease. The freeholder issues the lease to you, along with the right to live there peacefully, with "quiet enjoyment". At the end of the lease, the property once again becomes within the possession of the freeholder.
For property that is freehold, the owner fully owns the property and the rights and obligations that go with it. It is the owners sole responsibility for the maintenance of the property.
How leasehold property ownership works
If a Mortgage Lender is to advance mortgage monies for the purchase of a leasehold property, they will insist that the property has a minimum unexpired term of the lease, usually of between 30 - 50 years after the mortgage term has ended.
Generally, most leasehold properties are flats, although some houses are owned on a leasehold basis. Many leases are granted on a 999-year basis, and many houses now have the legal right to purchase their lease from the freeholder.
However, those living in flats, are generally best protected on a leasehold basis. Indeed very few lenders will consider advancing funds on a freehold flat!
Because of the layout of flats, and their close proximity to others, leases are designed to protect all interests with a series of stipulations, rules and regulations that you must adhere to as a resident. The lease sets out the responsibilities of repairs and maintenance, and for the upkeep of any common areas, such as gardens, stairwells, lifts, the exterior and the roof! As a leaseholder of a flat, you will usually have to pay a service charge, which will be for the maintenance of these common areas.
The solicitor should carefully check the provisions of the lease, and must advise you as to your rights and responsibilities. It is extremely important that you are aware of them. You will also usually have to pay a nominal Ground Rent to the freeholder each year, and the solicitor should check that the seller has maintained these repayments.
As a leaseholder, you now have the right to have the lease extended up to a period of 90-years, and even flat owners have the right to purchase their lease, although this should only be done through a management company formed to provide the stability of each individual's ownership interests.
Could Shire Direct arrange a mortgage on a leasehold property for me?
Yes! usually no problem, subject of course to the property being mortgageable, and having an appropriate unexpired term on the lease.
Why not give one of our mortgage experts a call on Freephone 08000 282 281 and check it out, or alternatively enquire online.
We can usually even consider freehold flats too! Remember our qualified mortgage advisors are available to discuss the options open to you, seven days a week until 10pm. Naturally we'll carefully assess your circumstances, needs, requirements and aspirations and come up with the most appropriate solution for you!
You'll find us to be friendly and professional and we hope we can be of help so please don't hesitate to contact us if you would like to discuss your requirements, naturally without obligation and we'll be delighted to provide you with an in-principle decision - whatever your circumstances!
So, we hope we've been able to explain Leasehold and shed some light into Leasehold property ownership for you and how we may be able to help. Remember, there is lots more information throughout our website, why not use our site search option near the top right of every page on our website to find the exact information you require, and if you think we can be of assistance then we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
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