How to sell a flat with a short lease
If you own a flat or house with a short lease, you may be wondering if you will be able to sell your property. The short answer is yes, but the experts at Home House Buyers explain what you need to consider and why it's more complex than you might think.
August 31, 2021
4 minute read
Can you sell a flat with a short lease? While the short answer is yes, the process can be complicated with a number of trade-offs to consider. It is also important to know that there are several restraints that could come up that can affect the length of the sale, as well as, the sale price that you end up receiving.
What is a short lease?
A property has a short lease if it has a lease of fewer than 80 years. This can change depending on where the property is located. For example, in London, there are many more short lease properties because of the greater number of flats. Generally, properties will have a lease of anywhere between 99-999 years when they are first purchased. You’ll find the lowest leases tend to be around 70 years, though this can be lower in certain cases.
Properties with a shorter lease tend to be less attractive to first-time buyers. However, there are still ways to make a sale if you have a flat with a short lease. A company such as Home House Buyers, which specialises in the quick selling of properties, takes advantage of stipulations in the market with the aim of helping sellers get the best value for their flat or house.
Is it possible to extend a short lease on a property?
With short leases causing such a headache for property owners, it’s no wonder many look at extending their lease. Fortunately, extending a lease on a property with a short lease is entirely possible and achievable when working within the parameters of current property laws and regulations.
It can be challenging to get an accurate prediction of the cost of extending your lease. While it’s possible to get a rough estimate using a leasehold calculator, the only way to get an exact cost is to serve a section 42 notice. This is a formal request from the leaseholder to the freeholder to extend their lease on a property. This right is stipulated in the Leasehold Reform, Housing, and Urban Development Act of 1993, allowing the leaseholder to have a 90-year extension on their lease. To initiate the statutory leasehold extension process, a section 42 notice must be served on the freeholder or landlord.
How long does the process of extending a lease take?
If you do plan on having the short lease on your flat extended, then you must first hire a surveyor to carry out a valuation of the property, which will be sent to your solicitor. Next, your solicitor serves a section 42 notice to either your landlord or freeholder, advising of the premium you’re willing to pay to extend the lease. This individual or organisation then has two months to either accept the extension or reply with a counter-notice.
Most negotiations rarely go to court, which normally happens if an agreement on a premium is not reached. You and your landlord/freeholder’s surveyors will be in the best position to negotiate a suitable premium for the lease extension. If the two parties are cooperating without issue, the lease extension can be done in as little as two months.
Can you sell a short lease property?
If you are not planning to extend your lease, you may wonder if it is possible to make a sale. Fortunately, the answer is yes. Every property has some intrinsic value, so it will always be possible to sell a flat with a short lease. Potential sellers need to bear in mind that they’re not likely to fetch a very high price for their property if it has an exceptionally short lease. Such sales should only be made when in need of capital quickly.
Most estate agents will not involve themselves in the selling of a flat with a short lease. However, there are several other alternatives open to sellers. One of the most successful is to sell on the open market, ideally with a cash buyer in mind. Advertise clearly that the sale property has a short lease and that the advertised price reflects the short lease.
With expert advice, you should have no trouble selling a flat with a short lease. This involves speaking to solicitors who understand the housing market and issues regarding property leases. Experts will also be able to help you obtain a section 42 so that you can get the ball rolling when it comes to extending the lease on your property.
Learn more about selling your flat with a short lease
To learn more about selling a flat with a short lease quickly, speak to the experts at Home House Buyers. Their team will be happy to discuss their property selling services in more detail. You can reach the Home House Buyers team over the phone by calling 0808 501 5566 or email any queries to firstname.lastname@example.org, where they’ll get back to you as soon as possible.
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