What is leasehold?

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

The term of the lease will be repaired at the beginning, decreasing in length each year. Therefore, if it were not for inflation, the worth of the flat would decrease gradually till the eventual expiry of the lease, when the flat go back to the property manager, although this goes through some rights to stay as an occupant in particular situations. The landlord can be an individual or company, including a housing association or local authority.

The leasehold ownership of a flat generally connects to whatever within the four walls of the residential or commercial property, including floorboards and plaster to walls and ceilings, however 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 property owner. The freeholder is accountable for the repair and maintenance of the building, with costs for doing so being recoverable through the service charges which are billed to the leaseholders.

When referring to the leasehold ownership of a home, this normally associates with the entire building - both internal and external - and can include a garden and/or driveway. Typically, the leaseholder of a home would be accountable for the repair work and maintenance of the entire building.

What is a Shared Ownership lease?

For those who are unable to purchase a home on the free market, Shared Ownership makes it possible for buyers to acquire a portion of a residential or commercial property while paying rent on the staying share to a proprietor.

Up till recently, the terms for Shared Ownership leases have actually been set at 99 or 125 years however under the brand-new Shared Ownership design as part of the federal government's Affordable Homes Programme, leases can be reached 999 years as standard. The home can be purchased or offered during that time.

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

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

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

Shared Ownership leases: FAQs

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

When the lease on a Shared Ownership home is first approved, the rent is normally calculated 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 rent will be 3% of the remaining share that's held by the proprietor. 3% of ₤ 50,000 would for that reason relate to ₤ 125 per month.

The lease will likewise provide that the rent will increase every year typically by a specified portion 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 bulk of Shared Ownership leases supply that the leaseholder can purchase extra shares - with most able to purchase up to 100% of the residential or commercial property. The term used to describe the leaseholder's right to buy extra shares is called staircasing.

Do I deserve to extend the lease on my Shared Ownership home?

A Shared Ownership lease is specifically 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 should always refer to your lease for precise conditions, the large majority of Shared Ownership leases do not permit subletting.

However, if your situations change (for instance, if you are needed to briefly move abroad for work) then you can call your property manager to discuss your alternatives. Please know that the property owner has a last say on allowing or declining subletting.

Do I have any responsibilities to the landlord if I wish to offer my share of the home?

Many Shared Ownership leases lay out that the leaseholder has to give a right of first rejection - or a 'nomination duration' - to the property owner if they wish to sell their home. Under a Shared Ownership lease, the landlord generally nominates a purchaser and the purchase cost is figured out by an independent surveyor appointed by the landlord.

This election period is normally around 8 weeks, although this can vary depending on the service provider. If the landlord is not able to sell the home during this time, the leaseholder is often enabled to then sell the home privately or through an estate agent of their choice.

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

Most flats, despite tenure, are offered as leasehold residential or commercial properties with the freehold held by the proprietor - this will frequently be a local authority or housing association.

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

A Shared Ownership lease is particularly 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. Once you have actually gotten 100% ownership in the residential or commercial property, this limitation no longer uses.

For additional information about Shared Ownership leaseholds, please go to the official LEASE website. LEASE are an independent body who provide complimentary guidance on residential leasehold (that is, a flat or house with a lease longer than 21 years) and park homes law. All of their consultants are legally qualified.