A guide to leasehold flats in Newington Green
Why is the average sold price of houses in Newington Green over £1.1m, yet flats for sale in this vibrant part of North London have an average asking price of just over £700,000?
It’s not just the fact that houses for sale in Newington Green offer more space than the one-bedroom split-level apartment on the top floor of a period converted building that M&M property is offering for a guide price of £380,000-£400,000.
It is down to the tenure of the property being bought or sold. Here, M&M Property explores the difference between a freehold home and one that comes with a leasehold. We will also highlight a relatively new type of property/land ownership.
The overwhelming majority of houses in Newington Green, Islington, Highbury and other parts of London that M&M Property has an in-depth knowledge of are sold on a freehold basis. On the other hand, it is rare to find a flat on the market that is not a leasehold property.
Purchasing a freehold property gives the buyer sole ownership of both the building and the ground it stands on.
This means the owner of a freehold home in North London is able to carry out any physical or decorative alterations to the property they wish– as long as they adhere to planning regulations.
Almost every flat in Newington Green, on the other hand, is a leasehold property, whether the residential asset is part of a purpose-built block, a period conversion or located above a commercial premises.
Unlike freehold houses, a leasehold flat gives the purchaser the right to occupy the property for the amount of time specified in the lease.
Although leaseholders own the property’s internal space, fittings, floors and walls, they do not own the land the flat sits on or the fabric of the building, including the roof and external walls.
As part of a leaseholder’s contractual rights, they would normally expect the freeholder – commonly known as the landlord – to manage, maintain and repair the building’s structure, common areas such as staircases, hallways and lifts and exterior grounds.
The lease issued by the landlord will outline an owner’s obligations as a tenant, and may include keeping the flat in good order, behaving in a ‘neighbourly’ fashion and not doing certain things, such as keeping pets in the flat, without obtaining the prior consent of the landlord. In some cases, this even includes goldfish!
A third option
A third type of property/land ownership was introduced in 2002 is an attempt to bring flat ownership into the 21st century.
Commonhold has many similarities with the US-style Condo (Condominium) system.
The land the building sits on is registered as commonhold land (as opposed to freehold land) and each flat owner, known as a unit owner, has two interests – the individual flat and a collective interest as a member of a Commonhold Association (effectively a residents’ association), which owns and manages the shared parts of the development on behalf of the residents.
Although this type of land ownership has yet to be introduced in Newington Green to M&M Property’s knowledge, the advantage of commonhold is that it gets rid of the concept of the declining asset because sellers and purchasers of commonhold properties do not have to worry about how many years are left on the lease.
M&M Property’s News section contains a wealth of information about buying, selling, renting and letting homes in and around Newington Green.
Over the coming weeks, we will include in-depth articles about the steps flat owners can take to extend the length of their lease, collective enfranchisement and points to consider when purchasing a leasehold property in Newington Green.
For further information about leasehold property for sale in and around Newington Green, contact M&M Property today.