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Monday, September 26, 2016

Are you a potential freeholder or a leaseholder?

If you want to buy a house in London you must first know a few things to manage it in the best way.

There are three ways you can own a property: freehold, leasehold or commonhold.

Let's first of all say that for a continental mental habit (I mean specially for an Italian, but I think the same can be said for a French, a German or a Spanish buyer) only the first and the third patterns are quite normal to understand and to be accepted as normal way of buying a flat, or a house or other kind of living estates.

As matter of fact as a freeholder you get the outright of a property and you become the absolute owner of the compound you are going to buy, both in good and in bad sides (I mean that being the freeholder the owner of the ground where the property is built, you 'll to pay all the taxes and all the expenses due for maintenance, such as external walls, ceiling, basement, roof and so saying). Of course you won't pay any rent to anyone, such has the leasholder to the landlord.

In fact when you buy as leasholder, you are in charge for an amount of time (usually from 80 to 999 years) and you recognise several duies to the freeholder, who becomes a sort of landlord.

In Italy this kind of contract resembles from one side the ancient usufructus and from another side the renting contract. It's a sort of mixture, difficult to accept more than to understand it.

Of course you're going to pay less for a leashold house than you pay for a freehold one.

Recently a third kind of buying has been introduced in England (in Scotland the leashold is not very spread): the commonhold.

By the commonhold you buy a flat in a block, buying at the same time the soil where your flat stands, the walls, terraces and roofs and all the common parts which belong to the other owners of different portions of the block (flats or commercial shops or deposits or whatelse the block has been divided in when built on.

In Italy such a buying is almost the rule when you buy a flat in a big town, where buildings are made of so many floors, while in the small towns you usually buy as a freehold.

My personal advice is to contact a professional reference, such as a solicitor and/or an agent in order to acquire all the knowledge you need in a such expensive and definitive field.

A special way of acquiring a flat in Englad is with the scheme "buy to let". It's a good way for investors by which you can pay the fractions of your mortgage by renting your property.

In Italy recently has been introduced another interesting formula called "rent to buy", which is almost of the previous scheme. In such agreement the buyer asks the freeholder who wants to sell the property, to start with a rent's contract. 

The canons you pay as a tenant will be deducted form the final price you'll pay to redeem the property as yours for ever.

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