Investors who start to study British property will soon discover two seldom-touched terms-Freehold and Leasehold. Before really spending money on investment, it is best to understand the meaning of the two before you know what you have invested in and what you will get in the end.
If you buy a Freehold property, in addition to the buildings on the ground that you own, the land under the ground (and sometimes the garden next to it) is also purchased. In the UK, it is usually a detached or semi-detached house.
After you become a Freehold property owner, your name will be recorded on the HM Land Registry. The rights and obligations are equal. All things related to construction and land maintenance are the responsibility of the owner.
As for the leasehold, Lease in Leasehold means leasing or renting. As the name suggests, it means leased property. Buyers do not completely own the property units, but lease for a certain number of years, generally ranging from 40 to 120 years. Of course, there are cases of up to 999 years. But the owner is the permanent holder, responsible for maintaining the exterior of the building, porches, and stairs. Leasehold is usually Flat instead of House, but there are exceptions to everything. If a property is purchased through the Shared Ownership Scheme , it is usually Leasehold.
Purchasing Leasehold's real estate is similar to ordinary rental apartments. If you want to carry out any major projects, you must obtain the owner's consent before starting the construction. You need to pay for building maintenance and insurance, and you also need to pay ground rent (ground rent). Many people also like to keep pets, and the lease will determine whether they can keep pets. If you do not pay the rent, you will be evicted. More importantly, once the lease expires, the property will be returned to the original owner, returned to Freehold, and let it go.
Therefore, the longer the lease, the more valuable the property. If the time is shorter, the possibility of obtaining a loan will be lower. If the lease time is less than 80 years, it will basically be difficult.
There are also buyers who try to extend the lease period and purchase more years. If it is a Flat, the lease period can be extended up to 90 years; if it is a House, the maximum period is generally 50 years, but it is often very expensive, and it also depends on whether it is a flat or a flat. House, at the same time, depends on a series of factors such as the length of the purchase of the property and whether Freehold agrees to extend the lease period.
So why do you still want to buy leased properties, and what is the point? The answer is that the price is far lower than that of freehold properties of similar size, shape, and location.
Which is better? There is no inevitable answer and it is up to investors to judge for themselves.
As a digression, all land rights in Hong Kong are Leasehold, with a certain period of time. The only exception is The Cathedral Church of Saint John the Evangelist on Garden Road in Central, which is the only land in Hong Kong that owns Freehold. Its historical and religious factors will not be repeated here.