Leasehold Information for Customers
Customer guidance on buying a leasehold property from Keepmoat Homes. What does this mean for you?
Throughout the country there are significant numbers of properties sold both freehold and long leasehold.
What does it mean to own a long leasehold property?
Owning a long leasehold property means owning a property subject to a long tenancy (or ‘period of rent’) in relation to the land that the property sits on. The land will remain within the ownership of the freeholder. The lease of the land actually grants the leasehold owner all of the rights of freehold ownership but will be subject to certain conditions and regulations, which will be specific to each development, and will be explained to you by your solicitor.
How long is the lease?
Where we own the freehold interest, the lease of the Land to the property owner is 999 years. Where the freehold interest is owned by a third party (for example, the local authority) we grant the maximum term possible (under our own lease) to the property owner.
What will owning a Leasehold Property mean practically?
In practical terms, owning the leasehold in a property is not very different to owning the freehold except that you will pay an annual ground rent to the freeholder to lease the land that the property is built on. This fee (the ‘ground rent’) will be reviewed every 10 years throughout the life of the term, with any increase being based on RPI inflation. Additionally, you may be charged a fee by the Landlord where consent is required to specific works that you wish to carry out to your property, e.g. to build an extension on your property. Your solicitor will be able to advise you on the terms of the lease.
Will this Impact on my Mortgage Offer?
Many banks and building societies are happy to lend on both freehold and leasehold properties on very similar terms. We have ensured that our lease complies with the latest lending criteria published by the major banks and building societies. However, we always recommended that you speak to an independent mortgage advisor about your individual requirements in order to obtain independent financial advice.
Can I buy the Freehold?
Within the law governing long leasehold property sales, after 2 years of owning your home you have the legal right to purchase the freehold interest in the land. Additionally, our sales executives will offer you the right to buy the freehold interest at the point of reservation. It is not our intention to retain the freehold interest in the land indefinitely, and so we reserve the right to sell the interest to a selected third party at an appropriate time.
You are not obliged to buy the freehold interest, but should you wish to do so, we would encourage you to get in touch with our sales executives or your regional Keepmoat Homes office as soon as possible to discuss the terms.
In any event, and regardless of whether the freehold is owned by Keepmoat Homes or a third party, you will have a legal right to apply to purchase the freehold once you have owned the property for 2 years.
IMPORTANT: we fully appreciate that buying a property is a big commitment and if you have any further questions on this matter we recommend you speak with your bank, building society, independent financial advisor or seek independent legal advice from your solicitor to clarify the situation.