Glossary - Leasehold

The exclusive right to possession and use of land or a property for a fixed period of time. The lease is the agreement that creates this right. Leased properties usually lie on land that does not belong to the owner of the property, therefore it is held under a lease for a number of years. When the lease expires the property itself would then return to the freeholder.

Most shops and business premises are sold on leasehold. Properties can be leased for anything from 6 months to 999 years.

Example: Buy to Let or for Business
Properties that are purchased on a lease hold basis are frequently purchased by property developers or by business seeking shop premises. Many people choose to buy flats or apartments as buy to let properties. These properties are usually lease hold, but whilst a landlord has possession of the property they stand to make a great deal of profit. Should the property increase in value the landlord could sell the property, again making himself a good profit. Consumers with a mortgage loan on a property with a lease hold could find that the freeholder may be willing to help with financial costs of development or improvements as these would obviously benefit that property. A term or condition of the leasehold is that the property is left in good condition.

Useful Tip
There is plenty of profit to be made in lease hold property as they are usually ideal properties to rent out. So long as the property is kept in good condition its value should increase along with the market.

Enquire Online for a FREE Loan Quote - UK LOAN ENQUIRY FORM
Enquire Online for a FREE Mortgage Quote - UK MORTGAGE ENQUIRY FORM

back to Glossary Index