A new homebuyer report from AA Legal Services has found that more than two in five first time property buyers don’t know the difference between a leasehold and freehold property. The report named “Safe as Houses” has also shown that a north-south divide on mortgage literacy is emerging, with people north of the Midlands less able to define a leasehold property than people in the south.

As we have seen four successive base rate rises in the past none of which have managed to have a major effect on house prices, mortgage lending in April is 18% higher than a year ago. Consequently the cost of getting on and staying on the property ladder has increased for first time buyers. The research has questioned whether a nation desperate to get a foot on the ladder is rushing into decisions urely because we are financially stretched as first time buyers.

The “Safe as Houses” campaign from AA Legal is a public awareness programme that helps homebuyers make informed decisions about purchasing their properties. The campaign also makes sure that homebuyers properly understand the financial and legal small print that surrounds the most important purchase of their life. A sample of 2,000 British homebuyers was asked by an AA poll whether they understood the difference between a leasehold and freehold property. From the poll, overall around 20% of those asked did not know what a freehold mortgage was, with 49% thinking it was something other than it was.

Among 18-24 year olds there was the lowest accurate understanding of the most basic of property terms. With an average spend of nearly £160,000 on a first property, only 59% knew what the term freehold meant and only 57% understood the term leasehold.

According to the survey AA found that a number of young homebuyers had some interesting ideas on that property terms meant. An example was around one in ten 18-24 year olds said that a leasehold property meant you were allowed to rent it to tenants and 2% thought it meant the homeowner was exempt from Council Tax.

James Molloy, Head of AA Legal Services commented: “Our research suggests that many homebuyers are so desperate to get onto the property ladder that they may be over-looking vitally important basic legal principals. For years, the legal community has not helped much in terms of engaging the public on legal aspects of home buying, something AA Legal Services intends to put right – by helping the public understand legal issues in plain English, so that they can make informed home buying decisions and feel in control of the process.”

Homebuyers who have recently moved into a new house and have found that they may be in need of a bit extra to carry out home improvements could look at taking out a secured loan as one of the many options available to help them on their way. A home improvement loan could allow for basic redecoration of living rooms and bedrooms to allow new owners to feel right at home.

Modernising a tired looking kitchen or bathroom with new appliances and surfaces could make a huge difference and could even add extra value to a property. With a secured loan there are endless possibilities, homeowners could even look outside to the garden for inspiration, conservatories and garden landscaping could add instant character to a property and could make a summer outside even more enjoyable. Made payable over a term to suit the borrower from 5 to 25 years and any amount from £10,000 to £100,000 a secured loan could allow homeowners to feel right at home in their new property.