If you want to buy a property but aren’t sure what’s out there, here are the 5 most popular options …
Moreover, this won’t be an immediate purchase, you will be legally (and financially) bound to your purchase for many years to come.
This means it is absolutely essential that before you commit to any financial outlay, you choose the type of property that is most suitable for you.
Here are the first 3 of the 5 most popular options for you to consider.
This is one of the most common types of ownership and the one you are likely to be most familiar with. Owning the ‘freehold’ means that you are the sole owner of both the property and the land it sits on. That ownership is indefinite and you are in control of how it is used but you will also be liable for all maintenance and repairs.
If you purchase the leasehold of a property it essentially means that you do not own the land the property sits on and, therefore, that you’ll be leasing the property from the freeholder. Most commonly leasehold properties tend to be flats rather than houses and a builder or company will own the freehold.
Leasehold properties are subject to a lease which means that there will usually more restrictions on what you can do with your property once you’ve bought it. You will be liable to pay ground rent to the freeholder and a service charge to a management company for the upkeep of the property.
However, if you do own the leasehold it may be possible for you to purchase the freehold in the future.
3. Right to buy
This option is only available if you are currently renting a property from the council. It allows tenants who have had a public sector landlord for at least three years to opt to buy the home at a discounted price.
If you qualify for right to buy, the discount you are entitled to will vary depending on:
- How long you have been living there
- How much the property is worth
- Whether the property is a house or flat
With regards to securing a mortgage, some lenders may allow you to use the discount as a deposit.
It’s also important to note that if you sell the property within the discount period, you will have to pay a proportion of the discount back to the council and if you decide to sell the property within ten years of purchasing it you will have to offer the property back to the council first before you try to sell it on the open market or to a private seller. However, after ten years of owning the property you are free to sell it on with no restrictions.
Next week we will share (and explain) options 4 and 5 but if you would like any help with a potential purchase or have any questions about buying or selling your home, please email Michael Likupe at firstname.lastname@example.org or call Michael on 0113 399 3408.