Evaluating the Value: Should You Buy the Freehold of Your Leasehold House?

Is it worth buying the freehold?

It is worth buying a freehold of your house if you have a lease on it. When you purchase a property on freehold grounds, you get the ownership of the house, and the land, it is on. 

When you buy a property as a leasehold property you https://www.leaseholdvaluations.com/buy-freehold-property/ only have the ownership of the property for a certain period which is stated in your lease. Once the lease expires, then the house will revert to the freeholder. In addition, leaseholders also need to pay other extra charges such as ground rent or maintenance charges on the property. Furthermore, there will be terms specified in the lease about what you are allowed to do with the property or not, For example, having a pet, starting a business from home. 

In England, there are currently more leasehold flats than houses. However, the North West has the highest number of leasehold residences, despite various leaseholder issues. For such reasons, the Government in 2019 stated that no new houses will be put on sale as a leasehold property.

The majority flats are sold on a leasehold basis although some do come with a share of the freehold.

The benefit of buying a freehold of a leasehold house

One of the benefits of purchasing the leasehold property is that you will only be liable for any maintenance you undertake as opposed to simply paying the landlord an annual fee and him doing very little for it.  Another benefit is that you no longer have to pay ground rent and also you can undertake whatever alterations you want to the property without seeking anybody’s consent. This can add significantly to the value of your house and you can arrange the house to suit your needs thereby making life a bit more comfortable.

The Leasehold Reform, Housing, and Urban Development Act 1993 allows leaseholders to purchase the freehold of their leasehold property after two years of leasehold ownership. Buying the freehold of a house is worth it or extending the lease can be a more suitable alternative if you do not have the funds to purchase the freehold? 

Owning a house or flat is a significant investment.

The state of leasehold ownership in the UK is improving but not yet complete. Hence, buying freehold of your property would be very beneficial. However, the process involved in purchasing your freehold is complex and confusing. Leasehold Valuations will guide you and advise you of your best options Feel free to call us at 01753 542984 for a free 10-minute consultation.

Selling a flat with a short lease

Selling a flat with a short lease

Selling a property with a short lease can become very problematic as depending upon the length of the lease many lenders will not lend on the property. This leaves you with a very small pool of purchasers. The lower the lease, the more restrictive this becomes. It is likely that you will have to sell your property for less than its true value because any potential purchaser will have to navigate through the lease extension process, with all the additional costs and time that encompasses.

Our lease extension experts can guide you through with efficiency.

What does short lease mean?

In general, a short lease is not as short as you may think. In lease extension terms any lease that drops below 80 years is classed as a short lease. It is stated that the shorter the lease of a property, the lesser the value.

Can you sell a flat with a short lease?

There is nothing to stop a property with a short lease selling on the open market but, as mentioned above, it is likely to restrict the type and amount of potential purchasers. For this reason, a lot of short-lease properties are sold at auction. When the duration of the leasehold declines below 80 years, the lease extension cost increases significantly. Hence, a lease with a short length can be difficult to sell and you will not get the best price you could if the lease was longer.

Usually, mortgage lenders will not accommodate flats with short leases..

How to check the lease of a property?

To know if your lease is shorter or not, you need to check your property lease. If you do not have a copy of your lease, then your solicitor can download a copy from the land registry website instantly for about £7. If you need any help regarding how to check the lease duration, you can contact our chartered surveyors who can assist you. Once you get to know the detailed information about your lease duration, it will be clear to figure out if your property lease has a short lease issue or not.

How to deal with Short Lease Issues

You can extend the short lease of your property: Leaseholders who have owned their property for 2 years have a statutory right to extend the lease by 90 years. Therefore, your new lease term will be equal to the remaining term on your lease plus 90 years. If you want to extend your short lease, our chartered surveyors will assist you.

If you are purchasing a property with a short lease you can ask the current vendor to serve the statutory notice to extend the lease and transfer the right to continue the lease extension process to you upon completion of the sale. This was you do not have to wait 2 years after purchasing the property to extend your lease.

Buying your freehold: Once you buy the freehold of your leasehold house, your property will convert to freehold. Then you can sell your freehold property, which will command a higher price and the buyers can get a mortgage on it. 

Sell your apartment or resident to a cash buyer: If you have a short lease on your property you can sell your property to a cash buyer as they will not need a mortgage.

By selling to a cash buyer, there will be several benefits, you will save the expense of purchasing or extending the lease, and you will not need any solicitor or surveyor to negotiate or guide you with the freeholder. 

So why not schedule an appointment with our experts and have a valuation of your property quickly. They will guide your short-lease term issue and will provide you with the best solution.

Problems with a short-term lease

Usually, short-term lease issues occur when the owner cannot manage to extend their lease

The biggest issue with the short lease is that shorter leases are hard to sell. The shorter the property lease, the lesser the value.

Are you facing problems during your lease extension process or buying or selling a freehold of a house? Call 01753542984 for a 10-minute free consultation and talk with our lease extension specialists to solve your issue.

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