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Making leasehold ownership work for you

Benefits of leasehold ownership
Feb 9, 2017

A leasehold grants you ownership of a property for a fixed term; your lease is a legal agreement with the freeholder, which determines the length of that ownership.

Most flats in the UK are bought and sold leasehold; a 99-year term is fairly typical, although 125 years is becoming more common, and the norm for council flats bought under the Right to Buy scheme. Anything around 250 years would be considered a  very long leasehold indeed.

There are 4.1 million privately owned leasehold homes in England, and 1.9 million flats rented in the social sector – 25% of all housing (HomeOwners Alliance).

But it’s worth bearing in mind that mortgage lenders are often reluctant to consider properties with less than 70 years left to run, which can make resale a challenge.

 

The benefits of an Emerging Property leasehold

Making Leaseholder ownership work for you

In the case of an Emerging Property lease, however, your agreement in most cases lasts for 250 years.

In other words, if you’re lucky enough to be just 30 today, you could pass the property on to your grandchildren when you’re 80 – and there’d still be 200 years left to run. And if your grandchildren do the same when they’re 80, there’ll still be 120 years – it’s like having the freehold.

Except with our properties, the freeholder is our developer partner.

 

This works in your favour in many ways

Do's and don'ts

The freeholder has made a long term commitment to consistent rental growth to make a profit, instead of cashing in immediately via inflated purchase prices. This ensures exceptional build quality, as well as the highest levels of maintenance and asset protection.

These are assured by the developer’s appointment of an accredited professional, 24/7 onsite management company to run all aspects of the property on your – and their – behalf.

In this way, the freeholder can offer you fixed NET yields of 8-10% and take on all your landlordly responsibilities for a 10-year period.

There will be no service charges, or any other charges for that matter, during those 10 years, after which you’ll still have many years of full ownership to do with what you will.

 

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