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Read the Mortgage and Property advice from Which? to help you find the best solution for your needs or use Money Compare to find the best mortgage for you.

What is a leasehold?

Under a leasehold agreement, you are effectively buying the right to live in and moderate the interior of a property for as long as the lease lasts. However, you will generally not own any communal parts of the building – such as lobbies and gardens in a block of flats – and you won’t own the land that your property is built on. Broadly speaking, this means you own everything within the walls of your property, including the floorboards and plaster but nothing outside of it, including the roof.

If you buy a leasehold property you are only able to live there for as long as the lease lasts, once this runs out, the property returns to the freeholder. If there is less than 70-80 years left on a lease you may struggle to get a mortgage for that property, or to sell it. But, once you have been living in a property for two years you can apply to extend the lease by up to 90 years – although you will have to pay to do this.

The freeholder will charge you ground rent to live in your property. You will also need to pay service charges to cover the cost of maintenance and repairs to communal areas of the building. The freeholder might manage this or employ a property management company to do it.

One of the risks of owning a leasehold property is that the freeholder may have the right to demand large sums of money to pay for external renovations to your property. This is particularly common in older blocks of flats, so it’s important to ask about scheduled and anticipated works before you buy a leasehold property.

For more information about how a leasehold could affect your mortgage selection give our experts a call and they can advise on the best option for your circumstance.

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