The properties were sold to the tenants who themselves own the freehold and each have a share in the building
Whilst this is a rare case in Nottingham as most residential apartments are owned by property developers or buy-to-let landlords, is this a sign of things to come in the property market as aspiring home owners are finding alternative ways of securing a home in the city for the long term?
Residential apartments in the city of Nottingham have always been popular, given the high proportion students in the city. But apartments in the city’s rental market have shown an increase in popularity as property investors pump money into new developments with commercial spaces on ground-floor level, as housing stock for first-time buyers remains relatively low.
The majority of apartments are sold on a leasehold basis but with this comes a risk of future property disputes. However, the recent sale of The Wedge suggests this is beginning to change as more people want greater control over their property and are seeking freehold properties.
But with 23 apartments to fill, it’s important that owners of a residential development understand the differences between freehold and leasehold which could ultimately make the difference between empty units and full occupancy.
The three most common forms of property ownership are:
- Freehold – where the buyer owns and has full control over the building
- Share of freehold – where the buyer owns a share and can influence decisions relating to the building
- Leasehold - where a resident occupies the property for a contractually agreed period, but the land is owned by the freeholder.
The concept of a leasehold may seem like an attractive one as tenants have a duty to pay annual ground rent to the freeholder, along with additional charges for maintenance.
However, more tenants are becoming aware of their rights under leasehold enfranchisement legislation, and the appetite for buying out freeholds is increasing, which could present an exciting opportunity for sale.
As many landlords often look for low-risk properties it’s worth comparing that with the potential returns.
The Wedge on Vernon Road was an unusual case for Bruton Knowles, as there are few residential ground-rent investments in the East Midlands, and this could present a sign of things to come for the property market.