Why are houses for sale in Belgravia on the market for considerably more money than flats in exclusive areas of prime central London?
It’s not just the fact that houses for sale in Belgravia, such as the three-bedroom property in Burton Mews that Best Gapp is offering for £5.95m, offer more space than flats or have private gardens.
In many cases, it is down to the tenure of the property being bought or sold. Here, Best Gapp explores the difference between a freehold property and one that comes with a leasehold before highlighting a relatively new type of property/land ownership.
The overwhelming majority of houses in Belgravia – including the spacious mews house – 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 owners of freehold homes are able to make any alterations they wish to the property – as long as they adhere to planning regulations or, if required, obtains Listed Building Consent.
Almost every flat in Belgravia – and other areas of prime central London that Best Gapp has an in-depth knowledge of, such as Knightsbridge, Mayfair, South Kensington and Westminster – is a leasehold property, whether the residential asset is part of a purpose-built block, a period conversion or located above the exclusive retail units within walking distance of Elizabeth Street and Sloane Square.
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, floor 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.
In Belgravia, Grosvenor Estates own many of the freeholds in the area. 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 a pet in the flat, without obtaining the prior consent of the landlord.
An alternative to leasehold and freehold
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 Belgravia to our 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.Best Gapp is a Belgravia estate agent, chartered surveyor and property valuer that specialises in leasehold enfranchisement – the term used to describe the legal process of helping owners to complete a freehold extension or freehold purchase of their property.
Over the coming weeks, our News section 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 Belgravia.
For further information about leasehold property for sale in Belgravia and other parts of prime central London, contact Best Gapp’s property specialists today.