Thinking of buying a leasehold property? It can be a savvy choice, especially for flats or shared buildings. However, leaseholds come with extra details that require careful consideration. Here's what you need to know before you commit to ensure your investment remains sound.
1. Lease Length is Crucial
The lease grants you the right to live in the property for a specific number of years. Once it expires, ownership reverts to the freeholder. A lease over 90 years is generally healthy, but if it dips below 80 years, renewing it can become costly and impact mortgage options. Always verify the remaining lease length and factor in potential renewal expenses.
2. Service Charges and Ground Rent
Leasehold properties often require regular payments for maintaining shared areas like gardens, lifts, or roofs. These service charges can vary significantly based on the building and its management. Request a detailed breakdown of costs from previous years to understand your financial commitments. Also, check the ground rent—ensure it’s reasonable and not prone to steep increases.
3. Restrictions and Responsibilities
Leases typically outline rules regarding pets, subletting, or making alterations. Scrutinise the fine print to understand what’s allowed. You’re usually responsible for the interior upkeep of your flat, while the freeholder manages the building’s structure and communal areas.
4. Building Management
A competent management company can simplify your life, while a poor one can lead to headaches. If possible, speak to current residents and review the management’s track record to gauge their efficiency.
Purchasing a leasehold property isn't inherently problematic, but it requires due diligence. By understanding the terms, you can ensure your new home remains an asset rather than a burden. If you're considering a leasehold purchase, our team at Bond Residential is here to guide you through the process with expert advice.
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