Share of Freehold vs Leaseholder: Choose your fighter!

Creeping into the arcade room at night. You scuttle by the Pac-Man and pull shapes past the Tetris. Not tonight boys, you’ve got bigger games to play right now and your eyes are firmly fixed on the property prize. The ultimate goal? To become the perfect property owner. With a top score mortgage under your belt. Pow pow! This real estate game hall is far too busy by day, so you’re about to beat the odds when everyone else sleeps on the best deals. Yes, right now it’s just you and your mortgage papers and we’re going to play Share of Freehold vs Leaseholder. Who’ll come out on top? Controllers at the ready, let’s meet your characters…

Character 1: Limber Leaseholder

First up we’ve got the lithe little Leaseholder. A flexible chap, with stretchable features. With this option, you agree to lease your abode from the freeholder for a set amount of time. The longer the lease, the more your property is worth and – fortunately – it can be lengthened (with the permission of the freeholder, which cannot be denied unreasonably). So get Stretch Armstrong about it and choose a short lease home for a cheaper price, before manoeuvring the extensions process after. Clever little leaseholder!

Special Moves: no responsibilities for organising building maintenance, usually an apartment

Ultimate Quest: to play by the rules

Character 2: Formidable Share of Freehold

Next on the scene, in a fetching purple bodysuit and spiky shoulder pads, we’ve got the heavily-armed Share of Freeholder. You may be more au fait with the simple Freeholder. But at Davies and Davies Arcade Hall we’ve got a generous offering of these ‘Share of’ properties. Replete with hidden benefits and nifty rewards, you may find yourself better off with this particular property type. With Share of Freeholder in your corner, you’ll own the leasehold of your property, plus a share of the freehold for the land and building the property is in. Score!

Special Moves: Team work makes the dream work – higher standards of property maintenance (as long as all co freeholders agree on works carried out), low or zero ground rent costs

Ultimate Quest: to hold the controls over what happens to your building

Ding ding! Share of Freehold vs Leaseholder Round One

Thumbs poised, let’s kick off the games! With an easy breezy, zero maintenance strut, Leaseholder is looking confident and squaring up to their sharp-elbowed opponent. In comes one member of the Share of Freeholder team, clipboard in hand and a hefty bill for ground rent fresh from Leaseholder’s original contract. Ooof, this one’s heavy. But what’s this? Leaseholder has a sidekick! A rather scary looking canine, with sharp teeth and a terrifying growl. Could this be a match for the sensible Share of Freeholder? A sign appears, shutting down the competition for now. “NO PETS” it reads, and we’re reminded that Leaseholders can’t always be leash holders, in this game of property ownership and rules. That’s right, as a leaseholder, there is often a list of rules to abide by within the property, while share of freeholders have much more control over the building’s maintenance, regulations and costs (as long as the whole team agrees).

Test your might! Onto Round Two

All is not lost for Leaseholder however, as Share of Freeholders aren’t fully in control. While leaseholders have to abide by works the freeholder sets and their fees and prices (which much be reasonable, may we add), share of freeholders often hold a lease with similar rules – just with slightly easier options to change, once all co freeholders agree. It’s a team game for SOF, with strength in numbers once you’re all on side. Levelling up, Leaseholder pulls a genius move, pointing to a shiny, upcoming *major reform* to leasehold law, recently pledged by the government. Set to save the leaseholder tens of thousands of pounds, Leaseholders are to be given the right to extend their lease by up to 990 years at zero ground rent. Ouch! Share of Freeholder didn’t see that one coming.

Finish them! It’s the last round

It’s the final round and Leaseholder is attempting to sell up their two bed flat. It needn’t be any more difficult than it is for Share of Freeholder, but watch out… Leaseholder is winded with a flurry of paperwork and legalities to sift through. What’s more, opting for a short lease has brought on more delays, with 85 to 90 years or fewer years remaining making it more difficult to mortgage. Had they plumped for a lease of 90 to 120 years, most lenders would have considered it a solid investment and they’d have no problem taking out a mortgage. There’s no cheat mode in property. It’s game over for now!

As you may have worked out, Share of Freeholders hold the most balls in their court due to more control over the building, and a lot less service charges and maintenance fees to consider. With an impressive combo attack of both a leasehold and a freehold, opting for Share of Freehold gives you shared ownership of a buildings freehold title. Plus plenty of deadly moves in the beautiful game of real estate. Just make sure you have cool co freeholders on your team and you’re not stuck with tricky neighbours – otherwise you’ll find yourself fighting your own side. Til next time, mortgage slayers, play on!

Please note that all content contained within our website is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. We advise seeking professional advice from a legal, financial, or other professional.

Contact us:

alex@daviesdavies.co.uk – Lettings Director (contact for lettings and property management)

mark@daviesdavies.co.uk – Sales Director (contact for sales, new homes and chartered surveying)

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios

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