The lowdown on leaseholds

I thought this week I would cover leaseholds to give you a little plain English snapshot into what they are and how they work writes property blogger Lea Beven.

What is a lease?

Most property in the UK is freehold - this is where the owner of the property owns both the land and the building.

However in the case of leasehold property there are normally two owners, the person that owns the land that the property is built on and the person that owns the building. Usually a lease is drawn up for say 99 or 125 years.

What if my lease has only a few years left?

If a lease is running low on years, then this will often put buyers off.

The person who owns the property can ask for a lease extension, and where this is granted the property remains in the possession of the building owner.

Where is it not extended, and runs out, then the building would revert back to the land owner - known as the freeholder.

Can a lease restrict me?

When a lease is drawn up there are rules that govern what can and can not happen in the building.

For example some freeholders will put in the lease that they do not permit pets in a block of flats or that satellite dishes can not put on the building.

You may be required to paint the building every 7 years externally and maintain the grounds, for example. These rules can be enforced by the freeholder.

Ground rent and service charge

You would normally pay an annual ground rent on a lease, this will be for the land owner for the use of the land.

Then you have a service charge to pay, normally covering the insurance on the building, communal lighting, cleaning, and pathways, window cleaning on blocks and general building maintenance, including the roof.

If you're looking to buy a property under leasehold, be aware that many banks will not lend on a property with less than a 75 year lease.

We found a great website with information on leases that may help if you need more information - the Association of Leasehold Enfranchisement Practitioners.