Drawbacks of leasehold property

Leasehold property has many advantages and disadvantages. In the end of the day it all comes up to you and what you like more, but before accepting to pay leasehold ground rent you should consider following things.

You are not fully in control of property

Do you remember how you felt when you were kid? Whatever you wanted to do, you had to ask parents for permission. Not so funny, right? Well, this is more-less like that. If you want to change something, if you want to change windows, or to build conservatory in courtyard, you have to ask freeholder or landlord. Not only that you have to ask for permission, but sometimes you have to pay for it

Freeholder controls your service charge costs

So basically you don’t only pay leasehold ground net, but other fees too. And not only that you pay for it, but you don’t have control over it. If freeholder says you have to pay something, you have to pay that; otherwise, you can move out or pay penalties.

Unordinary conditions

Freeholder can always set some unusual conditions. For example you can’t have pets, you can’t organize parties, you can’t use property for profitable jobs, etc. So this is just one more limitation of your freedom.

If price of property increases you don’t have any benefit from it

If somehow price of property increases you don’t have anything to do with it. You are not real owner of property, and if you want to buy freehold you will have to pay more anyway.

It’s not really yours

In some way, this is the most logical conclusion of this article. You can use property, you “hold” it in some way, but it is not really yours, and that will always make you think before you do anything with property.