Purchasing a home is likely to be the biggest financial commitment millions of young Britons make, yet many British youth are unaware of key terms used during this process.
40% of first time buyers are not aware of the difference between a freehold leasehold property and a leasehold property, according to a recent report from AA Legal Services .
Moreover, 20% of Brits do not know what a freehold mortgage is, with nearly half (49%) considering a leasehold mortgage to be something else other than what it is.
Many homebuyers have become so desperate to get onto that property ladder that sometimes they overlook critical legal principals.
This problem is more crucial amongst younger Britons. 41% of homebuyers aged 18 to 24 are not aware of what the term freehold means, with 43% ignorant of the term leasehold. This is the case even though they are intending to spend about £159,653 on their first home.
A freehold property is where a buyer owns the property outright, with no time limit. Furthermore, a leasehold property is one where the buyer gains the right to hold or use property for a fixed period at a set price, without transfer of ownership, on the basis of a lease contract.
Yet 10% of 18 to 24 year olds consider leasehold means you are able to rent the property to tenants, with 2% considering that it means the house is exempt from council tax.
One young homebuyer in 11 considers freehold properties have a lease of 50 years plus with 6% considering freehold properties as being exempt from capital gains tax.
Astonishingly, 2% of young Britons consider freemasons as those who are able to purchase freehold properties .
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Homebuying Confuses British Youth Thu, 07 Jun 2007
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