What Does Freehold and Leasehold Mean?
Freehold
In England most people would purchase Freehold property as they then own the land as well as the structure and therefore do not need to pay any rents, nor would anyone else have any rights to the property in any way. In the Southport area around the turn of the century, a lot of the land that was used for development of residential housing was owned by local families, Scarisbrick, Weld Blundell, Hesketh etc, and there are ground Landlords who still have restrictive covenants on Freehold property, whereby the usage of the property may be restricted and any alterations or extensions may require their consent, often with a cost associated. Delays can quite often occur in a chain sale purchase if there are any breaches of covenants.
Leasehold
Quite often in the Southport area property has the benefit of a 999 year leasehold interest where ultimately at the end of this lease period the property will revert back to the original landowner although due to the length of this particular form of lease it is unlikely that this will have a detrimental affect on value. Quite often the beneficiaries of the freehold will sell the interest for a nominal amount in the region of up to £500.00. This demonstrates the fact that leasehold can be judged as acceptable as freehold, and in any event covenants may still ensue after the freehold is purchased for this nominal sum.
Should there be a short term lease period of 99 years or less then you should seek advice from your lender or solicitor, and when buying flats where there are communal issues, then lease management/maintenance and service charge arrangements for the future are an important part of the property's long term security and value.
Stamp duty is a tax paid to the Government upon the purchase of a property, based on the following schedule:-
Up to £60,000 - NIL
£60,001 - £250,000 - 1 %
£250,001 - £500,000 - 3%
Over £500,001 - 4%
Your solicitor will handle the payment of this on your behalf, but may ask you for the funds up front.
What Are Restrictive Covenants?
Restrictive covenants are limitations imposed on the usage of a property, for example carrying out alterations or extensions may be disallowed unless permission is granted by the owner of the covenant.
A chain sale is a sale which relies upon a number of other properties to complete at the same time as your completion. Sometimes a delay in one completion can affect the whole chain, however your agent should manage the process to ensure that completion occurs smoothly and efficiently. Property offered for sale that does not form part of a chain can be attractive to certain buyers as the chance of delay is minimised.