What is leasehold?

To put it merely, leasehold ownership is a long occupancy. Your lease will give you the right to inhabit and utilize the home for a longer period - or the 'term' of the lease.

The regard to the lease will be repaired at the start, decreasing in length each year. Therefore, if it were not for inflation, the worth of the flat would diminish with time until the of the lease, when the flat returns to the landlord, although this undergoes some rights to stay as a tenant in certain situations. The property manager can be an individual or company, consisting of a housing association or local authority.

The leasehold ownership of a flat typically associates with whatever within the four walls of the residential or commercial property, including floorboards and plaster to walls and ceilings, however does not generally consist of the external or structural walls. The structure and typical parts of a building, as well as the land it stands on, are generally owned by the freeholder, who is likewise the proprietor. The freeholder is responsible for the repair and maintenance of the structure, with expenses for doing so being recoverable through the service fee which are billed to the leaseholders.

When referring to the leasehold ownership of a house, this generally connects to the entire building - both internal and external - and can consist of a garden and/or driveway. Typically, the leaseholder of a home would be accountable for the repair work and upkeep of the whole structure.

What is a Shared Ownership lease?

For those who are unable to purchase a home on the free market, Shared Ownership allows purchasers to buy a portion of a residential or commercial property while paying rent on the remaining share to a landlord.

Up up until just recently, the terms for Shared Ownership leases have been set at 99 or 125 years but under the new Shared Ownership model as part of the government's Affordable Homes Programme, leases can be reached 999 years as requirement. The home can be bought or sold during that time.

Those who purchase a home through the Shared Ownership plan will have a right to acquire additional shares in their residential or commercial property through a procedure referred to as staircasing and, in many cases, can go on to buy 100% of the residential or commercial property. At this point, the purchaser will end up being the straight-out owner.

Most Shared Ownership leasehold residential or commercial properties are granted by housing associations as part of their homeownership program. Such leases are usually in a format authorized by the Homes and Communities Agency (HCA, previously the Housing Corporation).

For info about the differences between a Shared Ownership lease and an ordinary long domestic release, we would advise visiting the official LEASE site.

Shared Ownership leases: FAQs

I have a Shared Ownership lease - how is the lease of the owned share calculated by the property manager?

When the lease on a Shared Ownership home is first granted, the lease is generally calculated at 3% of the equity owned by the landlord/freeholder. For example, if the residential or commercial property deserves ₤ 100,000 and the share owned by the leaseholder is 50%, the lease will be 3% of the remaining share that's held by the landlord. 3% of ₤ 50,000 would therefore equate to ₤ 125 each month.

The lease will also supply that the rent will increase every year usually by a defined percentage above the upward movement of the Retail Price Index (RPI).

Can I increase my share of the equity in the residential or commercial property rented to me?

The frustrating majority of Shared Ownership leases provide that the leaseholder can acquire extra shares - with many able to purchase up to 100% of the residential or commercial property. The term utilized to describe the leaseholder's right to acquire additional shares is called staircasing.

Do I can extend the lease on my Shared Ownership home?

A Shared Ownership lease is particularly omitted from this right under the terms of the Leasehold Reform Housing and Urban Development Act 1993, unless the leaseholder owns 100% of the lease.

Can I sublet my home?

While you need to always describe your lease for precise terms and conditions, the large bulk of Shared Ownership leases do not permit subletting.

However, if your scenarios change (for example, if you are needed to temporarily emigrate for work) then you can call your landlord to discuss your choices. Please understand that the proprietor has a final say on permitting or declining subletting.

Do I have any commitments to the proprietor if I want to offer my share of the home?

Many Shared Ownership leases describe that the leaseholder has to give a right of very first refusal - or a 'election period' - to the property owner if they want to offer their home. Under a Shared Ownership lease, the landlord typically nominates a buyer and the purchase rate is figured out by an independent property surveyor selected by the property manager.

This election duration is normally around eight weeks, although this can differ depending on the supplier. If the property owner is not able to offer the home during this time, the leaseholder is typically permitted to then offer the home privately or through an estate agent of their choice.

Does leasehold use to personal sale flats or just those offered through Shared Ownership?

Most flats, no matter tenure, are sold as leasehold residential or commercial properties with the freehold held by the proprietor - this will often be a local authority or housing association.

If I have a Shared Ownership lease, do I deserve to take part in a collective purchase of the freehold in my structure?

A Shared Ownership lease is particularly omitted from this right under the terms of the Leasehold Reform Housing and Urban Development Act 1993 - unless the leaseholder owns 100% of the lease. Once you have obtained 100% ownership in the residential or commercial property, this limitation no longer applies.

For more info about Shared Ownership leaseholds, please check out the official LEASE site. LEASE are an independent body who offer totally free advice on property leasehold (that is, a flat or house with a lease longer than 21 years) and park homes law. All of their advisors are legally qualified.