If you have a property with a lease that has less than 80 years remaining on it, it can be tough to find a buyer. If you're trying to sell through an estate agent, you'll usually have to extend the lease and this can be both expensive and time-consuming. In most cases, anywhere from £10,000. So, if you don't want to do that but you need to sell your flat with a short lease, what can you do?
At Property Buyer, we can help. We'll make you a cash offer for the flat after we ask you a few basic questions and research the value of your property. We guarantee no hidden costs, and we handle every case quickly and easily. In this guide, we'll explain how short leaseholds work, canvass your options and answer the most commonly asked questions about the process of selling flats with short leaseholds.
As noted above, selling a flat with a short leasehold can be a nightmare when you approach it in a conventional way. Anyone who might be interested in buying your flat will expect you to renew the lease, if you don't - because it's prohibitively expensive - your buyer will view this as a red flag. This is because any lease with less than 80 years left on it means the person has to pay "marriage fees" as well as the expected legal fees. Meanwhile, when the lease is extended, the property becomes significantly more valuable.
In sum, many people end up with a property they need to sell in order to free up cash, but can't afford to extend the lease in a way that will ensure the flat will actually sell. If you're one of these people, you could be stuck with a property you just can't seem to get rid of.
Having a flat with a short lease can cause a range of problems:
As a short leaseholder, you have two main options. You can either extend the short lease so that you can sell the flat more easily at some point in the future, or - if you can't afford to extend the lease - you can try to sell the flat now. Each option comes with advantages and pitfalls.
Extending the short lease to sell the flat at a later date means you'll get more money further down the line. However, you'll have to wait for it, and stump up cash for the extension in the meantime. Unless you have plenty of money, it's often simply impossible to renew the lease - especially if lack of funds is your main motivation for wanting to sell in the first place.
If you're not able to extend the lease on the flat, its market value is reduced. However, Property Buyer will buy any flat with a short lease, and we'll make you the best offer that we can. If you need money fast, we can help you convert your short lease flat into cash that you can invest in whatever you need.
A leasehold property is one that you have for a fixed term. You don't own the land, and you need to pay a ground rent on a yearly basis. Once the lease on the property runs out, the freeholder gets ownership of the property again. Meanwhile, a freehold property is one that you own along with the land on which it was built, and there is no cap on the length of ownership.
Your lease stipulates how long you'll own the property. If you have a flat with a short lease, you own it for a short amount of time. In many cases, these short leases are for 99 years or less.
Leasehold flats get less valuable as the time on the lease diminishes, so in general you want a flat with as long a lease as possible. Many experts would say that the ideal lease length is 999 years.
The simplest terms, if you get a 999 year lease then you have a more marketable lease because it's considered "as good as freehold." However, you still get to hold onto the previous structure of your lease, which includes information about obligations such as who is responsible for maintenance, contributions to services charges, and so on.
When your leasehold runs out, ownership goes back to the flat's freeholder, unless you're able to pay to extend the lease on the property. As noted above, it can be extremely expensive to do so.
The specific cost of extending the lease on your flat will partly depend on the length of time you're looking to extend the lease. You can use free lease extension calculating tools online to do this, and if you contact us we can also give you a rough estimate based on our experience. For most people, the precise figure doesn't matter - lease extension is simply out of the question due to the expense.
If you can't afford to extend the lease on your flat, you'll really struggle to sell it using an estate agent. Regardless of how you approach the sale, you'll be unable to get market value because of the complexities and expenses associated with extending the lease. Your best bet is to sell it through a cash buying property company like Property Buyer. A short lease doesn't dissuade us from buying a property.
Yes. If you want to sell your flat with a short lease, get in touch with us to find out how we can quickly and easily arrange this for you. We'll offer you a valuation free of charge or obligation, and we can guarantee a sale in the timeframe that you need. Our staff are highly experienced in dealing with short lease sales, so we'll be happy to answer any questions you might have.