What is leasehold?

To put it just, leasehold ownership is a long occupancy. Your lease will provide you the right to occupy and use the home for a longer period - or the ‘term’ of the lease.

The regard to the lease will be fixed at the start, decreasing in length each year. Therefore, if it were not for inflation, the worth of the flat would diminish gradually until the ultimate expiry of the lease, when the flat go back to the landlord, although this undergoes some rights to stay as a tenant in specific circumstances. The landlord can be a person or company, including a housing association or regional authority.

The leasehold ownership of a flat normally relates to whatever within the four walls of the residential or commercial property, consisting of floorboards and plaster to walls and ceilings, but does not usually consist of the external or structural walls. The structure and typical parts of a structure, in addition to the land it stands on, are normally owned by the freeholder, who is also the proprietor. The freeholder is accountable for the maintenance and repair work of the structure, with costs for doing so being recoverable through the service charges which are billed to the leaseholders.

When describing the leasehold ownership of a home, this normally associates with 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 entire building.

What is a Shared Ownership lease?

For those who are not able to purchase a home on the free market, Shared Ownership allows purchasers to acquire a portion of a residential or commercial property while paying lease on the remaining share to a property manager.

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

Those who buy a home through the Shared Ownership plan will have a right to buy additional shares in their residential or commercial property through a process called staircasing and, for the most part, can go on to purchase 100% of the residential or commercial property. At this point, the buyer will end up being the outright owner.

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

For information about the distinctions in between a Shared Ownership lease and a common long domestic release, we would suggest visiting the official LEASE site.

Shared Ownership leases: FAQs

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

When the lease on a Shared Ownership home is first given, the lease is generally computed at 3% of the equity owned by the landlord/freeholder. For example, if the residential or commercial property is worth ₤ 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 property manager. 3% of ₤ 50,000 would for that reason relate to ₤ 125 per month.

The lease will likewise offer that the rent will increase every year usually by a defined portion above the upward motion of the Retail Price Index (RPI).

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

The overwhelming bulk of Shared Ownership leases offer that the leaseholder can purchase additional shares - with many able to buy up to 100% of the residential or commercial property. The term used to explain the leaseholder’s right to purchase additional shares is called staircasing.

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

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

Can I sublet my home?

While you should constantly refer to your lease for specific terms and conditions, the huge bulk of Shared Ownership leases do not allow subletting.

However, if your situations alter (for example, if you are required to briefly emigrate for work) then you can call your property owner to discuss your choices. Please understand that the proprietor has a last word on allowing or declining subletting.

Do I have any obligations to the landlord if I want to offer my share of the home?

Many Shared Ownership leases detail that the leaseholder has to give a right of very first rejection - or a ‘nomination duration’ - to the proprietor if they wish to offer their home. Under a Shared Ownership lease, the landlord usually nominates a purchaser and the purchase cost is determined by an independent property surveyor appointed by the property manager.

This election period is normally around 8 weeks, although this can differ depending on the supplier. If the landlord is unable to sell the home during this time, the leaseholder is often allowed to then offer the home privately or through an estate agent of their option.

Does leasehold use to personal sale flats or simply those sold through Shared Ownership?

Most flats, regardless of tenure, are sold as leasehold residential or commercial properties with the freehold held by the landlord - this will often be a regional authority or .

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

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

For more info about Shared Ownership leaseholds, please go to the main LEASE website. LEASE are an independent body who offer complimentary guidance on property leasehold (that is, a flat or house with a lease longer than 21 years) and park homes law. All of their consultants are lawfully qualified.