Need To Sell A Flat With A Short Lease?

Do you own a property that has under 80 years left on its lease? Naturally, the ease of finding a buyer comes with difficulty. If you look to sell using a traditional estate agency, you’ll be required to apply for a pricey lease extension. With lease extensions costing at least £10,000. But what are your options if this scenario sounds unappealing? What can you do with a house or flat with a short lease?

At SellQuickly.com, we buy all kinds of properties with short leases. Here are some basic facts about your property to get started. We’ll then conduct a preliminary valuation, and then we’ll make you an offer within 48 hours. Below, we’ll tell you all you need to know about the nature of short leasehold. And cover the options with such a leasehold, including any major questions you may have.

What Is A Short Lease?

Contrary to the name, a short leasehold is fairly long – but short enough to cause problems, as we’ll see. It applies to any lease that has less than 80 years remaining. Though occasionally, leases are not classed as short until they get down to 70 remaining years.

Why A Flat With A Short Lease Can Be A Problem

Selling a flat with a short lease can make your life harder if you opt to use an estate agent. You’ll be under pressure from buyers to renew the lease, and there are issues either way. It will be expensive for you to renew the lease. It will also put buyers off your property if they discover they have to pay for the extension. It’s typical for people to end up in circumstances where they need to sell a short lease property. When they can’t get the money together to arrange the extension needed, options diminish to make the sale happen.

H2: Do You Own A Flat With Short Leasehold?

If you currently own a flat with a short lease, these are the main things to keep in mind:

  • Your property loses value as you come closer to the end of the lease.
  • Anyone looking to buy property sees short leaseholds as a red flag, as they require pricey lease extensions.
  • Potential buyers can’t themselves apply for the lease to be lengthened until they own the property for more than two years.
  • Remortgaging can be tricky – lenders are wary of short leases and will often deny associated mortgage applications. 
  • The less time on the lease, the more must be paid to extend it.

Your Options As A Short Leaseholder:

When you own a property with a short lease, you have two major choices. Firstly, you might pay for an extension on the lease to make it easier to sell in the near future. Secondly, and especially if it’s too expensive for you to extend the lease, you can attempt to sell the flat with the short lease intact. Here’s what you need to know about each route.

Option 1: Extend The Short Lease

If you pay to extend your short lease, you’ll undoubtedly earn more money from the sale later on. That said, you need to wait for the lease to be extended – which can be a slow process. It does alsorequire paying a lump sum which can often be £10,000 and more. Unless you’re fairly comfortable financially, it’s likely to be difficult for you to pay this amount for a short lease renewal. 

Option 2: Sell The Flat

For those who can’t pay for the lease extension before selling, the most obvious cost is the property’s market value dropping. If you opt to go with us, the remaining years on the lease do not matter. We can help as we are experienced exchanging short-lease properties for cash.

How Long Should Lease Be On Flat?

The property value drops when the remaining years on the lease goes down. This is why most people want properties with lengthy leases. According to property experts, the perfect lease length is 999 years.

What Does A 999 Year Lease Mean?

Basically, a 999 year lease on a property means having a maximally marketable home – it is comparable to having freehold. Meanwhile, the old structure of your lease endures, including all of the relevant obligations about service charge, maintenance and upkeep.

What Happens When The Leasehold Runs Out On A Flat?

After a house or flat leasehold comes to an end, the property’s ownership defaults to the freeholder. This can be avoided by applying for a lease extension, but (as stated above) this is a costly process.

What If I Can’t Afford To Extend The Lease On My Flat?

It’s very common to struggle to pay the amount required to extend your leasehold. There are free online tools that can help you calculate whether it will be possible for you. The costs are dependent on how much you’d like to extend the present lease. If you’re facing financial difficulties, however, the precise figure probably doesn’t matter, as any price will be too high.

Why Is A Short Lease Property Often Unmortgageable?

Your property’s lease shortens over the years, which in turn sees the market value drop. Ultimately, your property becomes worth less than the amount paid to purchase it. In addition, there are complexities associated with short lease property mortgages, and not all lenders have the relevant expertise to take these on.

You Can Quickly Sell Your Flat With A Short Lease To A Cash Buyer

If you’re looking to sell a property with a short lease, contact us today. Speak with one of our experts to discuss how we can make this happen for you. The process beings with a free valuation that we conduct on the basis of basic details you provide, and we make you an offer that you are free to accept or refuse with no associated fee. If you accept, we’ll even give you free, independent representation and can complete the sale as quickly as you need.