WHAT DOES LEASEHOLD MEAN FOR YOU? T

ACCORDING to the latest research from estate agents, the population seems to be exercising a ‘wait and see’ approach when it comes to today’s general election. As a result, the housing market took a pause in April as buyers and sellers were understandably unsure about the outcomes.

That the number of both buyers and sellers in the market fell, as people put their plans on hold until the result of the vote is clear, explained the National Association of Estate Agents (NAEA).

In April, 381 house hunters were registered per estate agency branch on average across the UK, down from 397 in March.

There were 36 properties available per branch typically, down from 39 in March. This was the lowest level seen since April 2016 when agents had just 35 properties on the market typically, as sellers held off until after the EU referendum.

The number of sales agreed per branch fell to eight in April on average, from 10 in March.

With the supply of available homes remaining tight, the proportion of properties being sold for above the asking price increased, to one in 14 (seven per cent) in April, from one in 20 (five per cent) in March.

Mark Hayward, chief executive of NAEA Propertymark, said: “Periods of political uncertainty tend to halt activity in the housing market, and this is exactly what we’re seeing this month.

“All of the main political parties have outlined significant housing promises in their manifestos and we’d hope to see these policies rolled out in the new government’s first six to 12 months in parliament.

“Buyers and sellers alike are recognising this and adopting a ‘wait and see’ strategy to decipher how or if the value of their existing or future homes will be affected.” HERE are 23.36 million properties in England and Wales – with 64 per cent occupied by the owner and the remaining 36 per cent rented out, either by a private landlord, local authority or housing association.

Before getting into the statistics, it would be wise to explain the difference between freehold and leasehold properties. When someone owns the freehold of a property they own it outright, including the land it is built on. Meanwhile, with a leasehold property the leaseholder owns the property for the length of their lease agreement. During that time, leaseholders must pay the person who owns land (the freeholder) ground rent and other fees. When the leasehold ends, ownership returns to the freeholder. Although the leaseholder can extend the lease or buy the freeholder out, there are rules and regulations with regards doing that.

Many assume that houses are freehold and flats are leasehold, but not necessarily. While many houses are indeed freehold, it’s important to check as it’s of course possible for them to be leasehold – usually through shared-ownership schemes.

In fact, more and more new homes builders are selling houses on a leasehold. The protection of the law afforded to leaseholders who own a flat is massive, but sadly lacking to leasehold houses sold privately.

Looking specifically at figures for Huddersfield, at the last count in the HD1 to HD4 post codes there were 51,971 properties. Since 1995, 38,883 properties in that area have changed hands and have been sold. Looking further at those 38,883 transactions across Huddersfield since 1995 – using data from the Land Registry and the conveyancer My Home Move – as much as 53.40 per cent of properties have been leasehold, which is significantly higher than the national average of 15 per cent.

There’s also cause for concern when it comes to a few new homes builders. There has been a growing, yet small, trend for new-build houses to be sold as leasehold in recent years. While not all house builders use this model, those that do maintain it helps make developments financially viable.

The issue comes when builders then sell the freehold separately to an investment company without informing the lease holder, which they are legally entitled to do. The law states that in England and Wales, the “right of first refusal” to buy the freehold applies to the leaseholders of flats – in other words the freeholder must offer it to the leaseholders of all the flats of the building first. However, unfortunately, this law does not apply to the leaseholders of houses.

So, if you are buying a new home and it’s a house – not a flat – make sure you check very carefully whether it’s freehold or leasehold. If it is a leasehold, while you do have rights, they are not as strong as for those people buying a leasehold flat. Mistake the property and it could cost you thousands of pounds.