Purchasing a new flat can be an exciting time for buyers, whether first-time or seasoned homeowners. If you’re planning to buy a flat, there are a few things you should know before putting in your offer.
Here are the essentials you need to know before buying a flat.
Freehold or leasehold
Firstly, you should be aware of the difference between freehold and leasehold properties. Freehold properties are those in which the land, bricks, and mortar are owned by you. Leasehold properties mean you will own the right to live in the property, but not the land the property sits on.
Most flats will be leasehold because they share a building with multiple other flats. The flats within a building are owned by the freeholder. Because a leasehold property requires a legal agreement between the freeholder and you, the process can be a little more complicated.
How long is left on my lease?
Leasehold properties buy you the right to live in the property until the lease runs out. As a result, if you are buying a leasehold flat, you should consider how long is left on the lease before putting in an offer.
Most mortgage lenders will not accept a mortgage with less than 70 years remaining on a lease – this is because they will struggle to resell the property in the event of repossession. It is possible to negotiate an extension on the lease, but this can be costly and take a long time to process.
You will need to budget your monthly costs when purchasing a property, particularly if you have mortgage payments to make. Unlike freehold properties, you will need to pay service charges and ground rent payments for leasehold flats. These are paid to the freeholder, with the amount you pay depending on various factors such as amenities, location, and if there are staff working in the building.
You should always make sure you are fully aware of these costs before purchasing a property to save headaches in the future.
Who manages the property
Leasehold properties are managed by the freeholder, although in many cases this responsibility is outsourced to property management companies. If you find an issue or would like to dispute any of your additional costs, then you could find yourself dealing with either the freeholder or an agency.
As you will be making regular payments to this person or company, you should ensure you know who they are early on to make sure you don’t miss any important payments.
How much can you afford?
Before you start looking for a flat to buy, you should work out how much you can afford. If you’re taking out a mortgage on your new flat, the best way to do this is to sit down with a mortgage advisor. They will assess your finances and give you an accurate overview of how much you can afford to borrow.
If you’re looking to buy a flat in the Andover or Whitchurch area, speak to the Graham & Co team today.