At Greenbelt, we believe it's important to be straightforward and open with people. Starting today, we will be producing a weekly 'Greenbelt Myth-Busting' blog post every Friday, directly addressing common queries, assumptions and misconceptions about all aspects of the land management industry.
We're proud to bring our customers and partner organisations the hard facts that they deserve, so cut out the conjecture with Greenbelt Myth-Busting today!
The myth . . .
I heard Greenbelt can affect my property’s designation as leasehold or freehold?
. . . busted
Greenbelt owns and manages public open spaces but never private homes or gardens. As such, we have no link at all to the leasehold or freehold status of a property. We hold no power to alter a property’s status as leasehold or freehold.
Our Annual Management Charge covers maintenance, inspection, administrative support and full insurance cover for work on the open spaces and components we own and manage. It should not be misconstrued as a ground rent against your private property.
Most UK residential properties will be designated as either leasehold or freehold. In essence, if you have a freehold property, you own your home and the plot of land upon which it is built.
By contrast, a leasehold property is one where you own your home outright, but not the land upon which it is built.
Instead, the land is 'leased' to you as part of a fixed-term arrangement with its owner (the 'freeholder'), who agrees for you to occupy that land in exchange for paying rent, exactly as a traditional landlord would do. This is often called a ground rent, as it historically meant literally renting the land itself.
Like-for-like, a leasehold property will appear cheaper to buy than an identical freehold property, because the land isn’t included in the initial purchase. Naturally, this is offset over time by the rent charge carried by the plot of land.
Many first-time buyers are drawn in by the apparently lower cost of a leasehold property and some enter into the sale without fully understanding the associated rent arrangement.
Did you know . . ?
Many people assume the ‘free’ in freehold refers to the fact it is owned by the homeowner and, therefore, should be free from a ground rent.
However, the modern word is actually derived from the 15th Century Anglo-French concept of ‘fraunc tenement’ – a ‘free hold’ in the sense it is a piece of property owned and held by a ‘free citizen’.