Property Types

In the UK we have two types of property ownership Freehold and Leasehold

With Freehold you own the whole of your property.

With leasehold you tend to share some parts of it with other people. A shared entrance or roof perhaps, hallways, gardens water pipes or whatever.

The reason leases exist is to create a link between the owners of the various flats in a building so that someone (usually the Landlord) can make everyone comply with their obligations to repair and maintain their own flat and contribute to the cost of maintaining, insuring heating and lighting etc the shared or common parts.

There are other ways of doing this and other countries do it without leases. But in the UK we are stuck with them.

The drawback to leases is that they are for a fixed term and will eventually run out. When they so you may be able to continue living in the flat as a tenant but you lose your real ownership and therefore a lot of the value of the property.

Originally people thought a 99 or a 125 year lease was long enough not to have to worry about it expiring, but recently people have started to get concerned about the length of their lease even when there are still many years left to run.

The main reason for this is that a landlord will always charge a fee for extending a lease back to a longer term and the amount of that fee increases as the lease gets shorter.