Things to Consider When Buying a Leasehold Property in St Albans

If you’re searching for a home in St Albans, it’s important to understand the key differences between leasehold and freehold properties. Broadly speaking, most apartments are leasehold and most houses are freehold, but this isn’t always the case.

Here’s a run-through of what the term ‘leasehold’ means, and its implications when purchasing a property.

What is a leasehold property?

Unlike a freehold arrangement (where you own the property outright), a leasehold means that you possess the property for a set period of time, which is usually 90 years or more. It’s the landlord who has freehold ownership of the entire building (i.e. the block that your apartment is situated in). However, it’s not just apartments that are typically leasehold; Shared Ownership and Right to Buy properties usually are too.

The key facts about leasehold properties in St Albans

-          You’re buying the lease for the property, not the actual property itself.

-          It’s usually the freeholder who is responsible for maintaining the building’s communal areas; e.g. receptions, lifts, stairwells, garden areas etc.

-          You might be limited in terms of what changes you can make to the property.

-          There might be restrictions in place regarding how the property is used. For example, you might not be allowed to sub-let a room to a tenant, or own a pet.

Service charges / ground rent

It’s well worth exploring leasehold properties in St Albans, as many offer great value for money. However, it’s vital to factor in the additional costs of service charges and ground rent when you’re working out your budget.

Ground rent is charged by the freeholder, in exchange for the right to have a property on their ‘ground’. This is usually a small fee of around £50 to £100 a year. Be aware that some new developments in St Albans may charge slightly more, and that these charges can legally be adjusted over time.

Service charges cover all maintenance activities, and the building insurance. They may be higher in instances where the apartment block offers luxury features (e.g. a concierge service or a communal gym).

Leasehold lengths

When buying a leasehold property in St Albans, one of the most important things to find out is how long the leasehold length is. This has serious impact in terms of value, as once it’s expired, the property is legally owned by the freeholder again, not you. This isn’t an appealing prospect.

It’s possible to extend a lease after you’ve purchased your home, but be aware – this can get expensive, and you’ll need to have owned the lease for at least two years. Additionally, you might find it more difficult to get a mortgage, as lenders are wary about homes with less than 90 years left on the lease. Quite simply, it’s far easier to negotiate the terms before you commit to buy.

If you’d like to find out more about leasehold properties in St Albans, get in touch with our team today; we’ll be happy to answer your questions.