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What is leasehold?
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To put it simply, leasehold ownership is a long tenancy. Your lease will give you the right to inhabit and utilize the home for a longer duration - or the 'term' of the lease.

The regard to the lease will be fixed at the beginning, reducing in length each year. Therefore, if it were not for inflation, the worth of the flat would decrease with time until the eventual expiration of the lease, when the flat go back to the property owner, although this undergoes some rights to remain as a tenant in certain situations. The proprietor can be an individual or business, including a housing association or local authority.

The leasehold ownership of a flat usually relates to everything within the four walls of the residential or commercial property, consisting of floorboards and plaster to walls and ceilings, however does not usually include the external or structural walls. The structure and parts of a structure, in addition to the land it bases on, are generally owned by the freeholder, who is also the proprietor. The freeholder is accountable for the upkeep and repair work 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 typically connects to 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 and maintenance 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 makes it possible for buyers to acquire a percentage of a residential or commercial property while paying lease on the remaining share to a landlord.

Up up until just recently, the terms for Shared Ownership leases have actually 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 standard. The home can be bought or offered throughout that time.

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

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

For info about the distinctions in between a Shared Ownership lease and a common long domestic release, we would recommend going to the official LEASE site.

Shared Ownership leases: FAQs

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

When the lease on a Shared Ownership home is very first given, the lease is typically determined 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 property owner. 3% of ₤ 50,000 would therefore equate to ₤ 125 per month.

The lease will also provide that the lease 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 rented to me?

The frustrating bulk of Shared Ownership leases supply that the leaseholder can purchase 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 buy additional shares is called staircasing.

Do I deserve to 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 must constantly refer to your lease for exact terms and conditions, the huge bulk of Shared Ownership leases do not allow subletting.

However, if your circumstances alter (for instance, if you are required to temporarily emigrate for work) then you can call your property owner to discuss your choices. Please know that the property owner has a final say on permitting or refusing subletting.

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

Many Shared Ownership leases describe that the leaseholder has to provide a right of very first refusal - or a 'nomination period' - to the property owner if they wish to offer their home. Under a Shared Ownership lease, the landlord usually chooses a purchaser and the purchase price is figured out by an independent property surveyor designated by the property manager.

This election period is typically around 8 weeks, although this can differ depending upon the provider. If the property manager is unable to offer the home throughout this time, the leaseholder is often enabled to then offer the home independently or through an estate agent of their option.

Does leasehold apply to personal sale flats or simply those offered through Shared Ownership?

Most flats, regardless of tenure, are offered as leasehold residential or commercial properties with the freehold held by the property manager - this will typically be a local authority or housing association.

If I have a Shared Ownership lease, do I deserve to take part in a cumulative 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 acquired 100% ownership in the residential or commercial property, this constraint no longer uses.

To find out more about Shared Ownership leaseholds, please visit the main LEASE website. LEASE are an independent body who supply free suggestions on domestic 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.
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