Recent research revealed a demand for city flats as people return to the office.
The pandemic lust for green space and a spare room is on the back burner as people head back to the city for work. What was once essential has now moved down on the list of priorities for people looking to buy, with shorter commutes and urban amenities becoming the top factors.
But what do you need to know when buying a flat for the first time? Here are some points you need to consider.
Freehold VS Leasehold - what's the difference?
A freehold property means you own everything up to the boundaries listed on the Land Registry title and deeds. This type of hold is more common when buying a larger property such as a house.
Leasehold, however, is more commonly associated with flats. This type of hold means you own the right to live in the property, but you may incur additional costs such as service charges and ground rent.
Service charge and ground rent
Most leasehold properties come with additional costs.
The service charge covers the cost of maintaining the building - cleaning of communal areas, heating, repairs, call-out fees, and so on. The ground rent is the money you pay the freeholder to live on the property's land.
It's vital to check the additional costs associated with the property as they could impact the amount you can borrow - learn more here.
How does a lease on an apartment work?
A lease is a legal agreement that outlines the number of years you will own the property - this is between you and your landlord. Once the lease comes to an end, ownership transfers to the person (or entity) that owns the land (i.e. the freeholder).
Before viewing a leasehold property, you should check the lease length with the estate agent or seller - a lease below 80 years can start to affect the property value and may cause you issues when trying to sell in the future. A mortgage broker can advise you on this during your appointment.
Is urban living here to stay?
With many employers adopting the hybrid model, you will likely be spending more time in the office. Therefore, it makes sense to stay closer to work.
Flats are not for everyone, but it is worth exploring your options. If you need to know more about deposits and the home buying process, read our article on 95% mortgages.