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Deciding on a Property
When you find a property you should arrange to look round it to make sure it is what you will need and to get some idea of whether or not you will have to spend any additional money on the property, for example, for repairs or decoration. It is common for a potential buyer to visit a property two or three times before deciding to make an offer.
Ask if there`s a Home Information Pack (HIP). This will give you important information about the property you`re thinking of buying, including an energy performance certificate, local authority searches and evidence that the person selling the property is entitled to do so.
Is the Property Leasehold, Freehold or Commonhold:
Freehold Property
If the property is freehold, this means that the land on which the property is built is part of the sale and no ground rent or service charge is payable.
Leasehold Property
A property may be leasehold, which means that the land on which the property is built is not part of the sale. You have to pay ground rent to the owner of the land - who is called the freeholder.
The length of a lease can vary and you should check that the length of the lease on the property you are interested in buying is acceptable to the mortgage lender. You should consult an experienced adviser, for example, at a Citizens Advice Bureau.
In addition to ground rent on a leasehold property, you may have to pay an annual service charge. This usually happens with a flat. The service charge covers such items as maintenance and repairs to the buildings, cleaning of common parts and looking after the grounds.
A group of leaseholders living in the same building may have a right to jointly buy the freehold of the building or take over its management.
Commonhold Property
If the property is commonhold, this means that you can buy the freehold of a flat and own common parts of the building jointly with the owners of other flats in the building (known as a commonhold association).
In commonhold a ground rent or service charge is not payable. However, a share of the commonhold association`s expenditure on maintenance, insurance and administration will be payable for the common parts of the building.
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