Are there hidden costs when buying a leasehold property?

You already know this by now that when it comes to buying a property in England and Wales, there usually two options that is, freehold or leasehold. Most people prefer buying freehold properties as there are lesser risks involved as compared to leasehold where one can be involved in a leasehold scandal. But in most cases if you want to buy a flat you are going to be buying it in leasehold basis because most flats in England are available in leasehold basis. Some people feel like there are hidden costs involved with leasehold properties and that’s why they prefer freehold properties. But are there any hidden costs? I am not so sure about that. What I am going to do is explain to you what you need to know about leasehold properties before using your money to buy a home. And from my point of view I don’t think there are any hidden costs.

What you need to know about leasehold properties.

Buying a leasehold property is way cheaper compared to purchasing freehold property but if you look at the bigger picture, buying a leasehold property might potentially be more expensive than buying a freehold property. When you buy a leasehold property you are required by law to pay a certain amount of ground rent that is stipulated on the lease agreement that you will sign with the freeholder. Currently the average amount is paid as ground rent is 480 pounds per year. This amount can be more or less depending on your agreement with your landlord. Also you should keep in mind that the landlord can increase the amount of you are supposed to pay as ground rent after a certain period of time in order to combat inflation. This is where many feel like there are hidden cost but if you read your contract carefully you will understand everything plus you have the right to challenge the freeholder if you feel like the amount is too much or unnecessary.