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While selling a leasehold property should be straightforward, you'll want to be aware of the potential problems that could make it harder to sell. We explore these and potential solutions, alongside the process and the paperwork involved, the costs and how long it takes.
There’s always a lot of paperwork and hoops to jump through when you sell a home. With a leasehold property there are a few extra steps compared to selling a freehold home but with a bit of planning they shouldn’t cause you a problem.
For more on the fees, legal process and how long it takes, read our guide to the leasehold conveyancing process.
Leasehold properties are typically flats. The Government estimates there are around 4.98 million leasehold homes in England, of which 70% are flats and 30% are houses.
When you buy a leasehold property you buy a lease for your home from the freeholder for a set period of time. You don’t own the land your home is on and only have use of it for the duration of your lease.
The length of your lease will vary. Typically, they are 90 to 120 years, but many new builds now come with a 999-year lease. You can find out more in our guide to the difference between leasehold and freehold. But essentially, as you probably know, leasehold properties come with more ongoing charges than a freehold property. You may be required to pay maintenance fees and an annual service charge.
If your lease is shorter than 80 years that will create some issues when you come to sell, but we’ll cover that below.
Major leasehold reform is currently underway in the UK. This includes plans to make it easier and cheaper to extend your lease or buy the freehold and making it easier and quicker to sell a leasehold property by setting a maximum time and fee on getting information from the freeholder. If you live in a leasehold property, sign up to our newsletter to be kept informed of when and what leasehold reforms are being introduced.
Absolutely. As the leaseholder you have the right to sell your home at any point during the lease period. In effect you are selling the lease to the property to another owner, the building will still belong to the freeholder.
If your lease is making your home difficult to sell – for example, if you pay a very high service charge – you could consider joining with your other leaseholders to buy the freehold. A property with a joint freehold may be easier to sell as you would have control over charges.
You may also struggle to sell your leasehold property with a short lease – anything under 80 years can be tricky because prospective buyers will struggle to find a mortgage lender willing to lend. It can also be more expensive to extend a lease after it falls below 80 years. This is because the freeholder can put an extra charge on the extension after that point. So, if your lease is close to or under 80 years, consider extending your lease before you put it on the market.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
No, it isn’t usually harder to sell a leasehold property as long as you have over 90 years remaining on the lease. Basically anyone looking to live in a flat is likely to end up looking at buying a leasehold property, so securing an offer shouldn’t be difficult.
The things that could make it harder to sell a leasehold property, apart from a short lease, could include:
For solutions to these potential barriers, read on.
A bit of forward planning can help you make selling a leasehold property easy. Let’s look closer at the main challenges with selling a leasehold property and how you can tackle them:
If you have under 90 years left on your lease it may worry potential buyers as you are selling a flat with a short lease. As mentioned, a lease shorter than 80 years can be more expensive to extend and prospective buyers will struggle to get a mortgage. While you can sell a property with a shorter lease, you are likely to lose money on the value of your home.
The answer is to extend the lease before you put your home on the market, or at least start the process. It will cost you, but your leasehold property will be a lot easier to sell. Find out more in our step-by-step guide to extending your lease.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
With a leasehold property you pay the freeholder rent for the land your home sits on. Known as ground rent it can add a significant amount to the cost of owning your home. Something which can be off-putting for potential buyers.
The solution is, again, to extend your lease. A change in the law in 2022 – The Leasehold Reform (Ground Rent) Act – means that freeholders can only charge a peppercorn ground rent on new leases. In effect this has abolished ground rent on new leases. If you extend your lease the peppercorn rate will apply to the extended time on the lease beyond 80 years.
When you sell a leasehold property your buyer’s solicitor is going to go through the lease with a fine-tooth comb. Any clauses that are going to cause problems for the new buyer could affect your sale. This could include high service charges, sweeping up clauses for management expenses, issues with sinking funds and administration fees.
It is difficult to eradicate these problems, but not impossible. You could try to negotiate with the freehold to change the clauses. Or, if they haven’t been enforced during your ownership, make that known to you solicitor and the buyer’s solicitor. Another option is to join together with your other leaseholders and buy the freehold so you can eradicate these clauses yourself.
If you are unable to find your freeholder, they are known as being ‘absent’. This could cause you big problems when you are trying to sell your leasehold property. You could struggle to extend the lease or get the information you need for the Leasehold Pack.
Buyers may also ask for a discount due to the issues they may face if they buy a property with an absent freeholder. One solution is to buy the freehold of your building with your neighbours. This will resolve the issue of the missing freeholder, and you can extend your lease at the same time. Find out more in our guide to absent freeholder problems.
Badly maintained communal areas, such as gardens and stairwells, could be a sign the managing agent isn’t looking after the property well which could put off buyers.
Chase your freeholder or managing agent to get repairs and maintenance completed before you put your property on the market to make a sale easier. Alternatively, you could spruce up the communal areas to make your property more attractive to buyers.
Take a look at our guide on Why isn’t my house selling? for more reasons why some homeowners struggle to sell.
In the wake of the Grenfell Tower fire disaster new fire safety regulations were brought in for cladding on residential buildings. To ensure external wall systems (EWS) were properly assessed for fire safety, the EWS1 form was introduced in 2018. An EWS1 is required for buildings over 18m.
The EWS1 form, also known as an EWS1 certificate, was intended to reassure lenders so that mortgages can be offered on flats within a building that has cladding. If your building has an EWS1 form, you should be able to get it from the owner of your building. Alternatively, you may be able to find it on the Building Safety Information Portal.
If your flat has cladding that has been deemed unsafe, it may need to be removed and replaced before starting the process of selling your flat.
Get all your documents together and you can make selling your leasehold flat a lot simpler. This is everything that you will need when selling a leasehold property:
On top of this you’ll need all the usual paperwork that accompanies the sale of any property. This includes:
You can find out more about these in our guide to the 11 Documents you need to sell your house.
These are the most common questions buyer’s ask about leasehold properties:
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The timescale for leasehold conveyancing can be slightly longer than a freehold property due to the extra paperwork and checks that are done. Typically, it should take around 8 to 15 weeks from accepting an offer to completing the sale of your leasehold home.
One of the best ways you can keep the time down is to be aware of how long things should take and chase your solicitor and the estate agent to ensure everything keeps moving along. Key to this is instructing a solicitor when your home goes on the market, rather than waiting until you have an offer.
Get instant quotes from regulated and reviewed conveyancing solicitors that cover your area. Our customers save on average £490.
This is a timescale for selling a leasehold property:
The average solicitor fees for selling a leasehold flat are around £910 – £1,250, according to research by Reallymoving. Conveyancing fees for leasehold are usually around £300 more than for a standard property.
You will also need to pay for the Leasehold Management Pack. This typically costs around £500 but it could be as low as £300 or as much as £800. Find out more about the cost of selling your home.
If you’re looking for a solicitor to do the legal work for your leasehold flat sale get instant quotes from regulated and reviewed conveyancing solicitors that cover your area.
The first page of your lease will tell you the length. If you don’t have a copy of your lease to hand you can ask the estate agent or solicitor who handled the purchase of your home. Alternatively, you can find out with a search of your leasehold title on the HM Land Registry and buy a copy of the title register for £3.
If you only have a short lease left, then it may be a good idea to extend the lease before you sell. A lease of less than 80 years will cause concern for a buyer as it will be more expensive to extend. Generally, if your lease is less than 85 years you may want to consider extending it. Find out more in our guide to when to extend your lease.
A Leasehold Information Pack – or Leasehold Management Pack – is essential and must be provided to your buyer. Your solicitor will usually request the pack from the freeholder or their agent. At present getting this information can cause major delays as freeholders aren’t legally required to provide it in a set timeframe, but this is set to change under proposed leasehold reforms.
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