If you buy a house, you will buy the freehold and will own the property outright. If you buy a flat or maisonette, you will usually buy a long lease. Leasehold means the right to live in a property for a fixed number of years. All flats sold to our tenants under the Right to Buy scheme are sold on a long lease (125 years). A tenant with a long lease (a long leaseholder) has bought the right to live in his or her property for the length of the lease. The council still owns the building that contains the flat, along with the internal and external communal areas.
At the end of the lease, the council becomes the legal owner of the flat again, unless the leaseholder exercises his or her legal right to buy a new, longer lease. In some circumstances, long leaseholders in the same block of flats have a legal right, as a group, to buy the building from the landlord.
As a leaseholder, you only have to pay us a small token rent (known as a ‘ground rent’) of £10 a year. But you will also have to pay service charges. These can be several hundred pounds each year, or much more if the block needs major repairs or maintenance, such as a new roof or new windows.
The lease is a legal contract between you, the leaseholder, and us, the council and it sets out both parties’ legal obligations.
We strongly advise you to read the lease carefully and seek legal advice before you buy. It is important that you understand fully what you are taking on.