Thinking about getting on the property ladder in Reading? That’s fantastic! But before you take the plunge, do you know what types of property ownerships are, like what is freehold or leasehold? And which is the right choice for you? 

In this guide, we’ll explore are pros and cons of both leasehold and freehold from a mortgage broker Reading, drawing from their firsthand experience to help you understand the property ownership type and that can help you to make your decision. 

Reading Living

Reading is a vibrant town on the Thames and Kennet rivers in Berkshire. The reading commercial sector is known for its information technology and insurance, which offer a lot of job opportunities. Reading is well-connected by both rail and road, which makes it easy to commute to London and Heathrow.

The property market in Reading offers a mix of houses and modern flats, and apartments. Property prices can vary depending on the area, but they tend to be slightly more affordable than in London, 

Are you thinking of buying your first property in Reading and are not sure if you should go for leasehold or freehold? The answer to this question can depend on many factors like budget, preferred lifestyle and your personal circumstances. Let us discuss the ups and downs of the leasehold and freehold. 

What Is Property Ownership Type 

When it comes to owning a house, there are two major forms of ownership involved in the UK - freehold and leasehold.

Freehold property: This type of property ownership means you own the property and the land it is built on without time limits and restrictions on the period for which you hold the ownership of the property. Almost all the houses are freehold.

Leasehold property: A leasehold property means you own the property but not the land it is built on. The freeholder grants an individual the right to occupy the property for a fixed term on lease, usually between 99 and 125 years. Most of the flats are leasehold. 

What Are the Most Important Things to Consider About Leasehold and Freehold? 

Whether you should buy a leasehold or a freehold property will depend on many important factors, which we have listed below.

Property budget: If you have a larger budget, you can afford to buy a freehold house. However, with a smaller or more limited budget, purchasing a house may be beyond your financial reach. 

Long-term property goal: Your long-term property goal will influence whether you plan to stay in the same area or if you might consider moving in the future. 

Space and privacy: How much space you will need, like a house will have extra room, loft space or garden, and it offers more privacy than a flat. 

Advantages & Disadvantages of Leasehold Property

Advantages of leasehold properties 

1. One of the main advantages of leasehold properties is that they are cheaper than freehold properties in the same area. This means lower deposit, lower mortgage payments.
2. Leasehold properties are more convenient as they are on the same floor and near town centres 
3. Leasehold properties offer lower maintenance as most of the repairs are done by the management company.

Disadvantages of leasehold properties 

1. Leasehold properties have limited space, as flats do not offer loft space or a garden.
2. Lower price appreciation over the long term. 
3. Lease extension, service charge and ground rent can be an extra expense. 
4. Leasehold flats offer less privacy. 

Advantages & Disadvantages of Freehold Property

Advantages of Freehold Properties 

1. Freehold properties are a lot more spacious than leasehold, as extra space in a room, loft, or garden can be a lot more useful. 
2. Freehold houses will appreciate the price over time. Doing extensions or improvements can add significant value. 
3. Freehold properties offer more privacy and security than leasehold flats. 

Disadvantages of freehold properties 

1. Freehold properties can be a lot more expensive than leasehold flats. 
2. You are responsible for all repairs and maintenance. 
3. This type of property can be expensive to keep for day-to-day use. 

Final Thoughts: 

Overall, Reading offers a great balance. It’s definitely a desirable place for people who want to live close to London without the sky-high prices. Whether you want to buy a freehold house or a leasehold flat, that can be down to your preference and needs.

But if you need free mortgage advice, then it is always advisable to work with Mortgage Broker Reading. Their mortgage broker are experienced professionals who can help you to find the best mortgage deal for your first purchase in Reading.