The remaining length of a lease can and will affect the property price. Most of the flats and some of the houses on the market are leasehold properties in the United Kingdom.
In order to extend a lease, you must pay a significant premium under 80 years left on your lease. Under that figure, the value of the property starts to decline, and you can expect the premium to increase significantly.
Regardless of the length of the remaining lease, you will be able to sell your short lease property. In many cases, auctions are considered, but this may not always be necessary depending on how long you still have left on your lease.
Many mortgage lenders in the UK require a minimum unexpired leasehold term to be 80 or more years. So in order to achieve the best price for your property, it is worthwhile considering extending your lease. Specialist companies like Hamilton Paige can assist you with extending your lease prior to selling your property. This way you will achieve the highest sale price for your property.
My lease expires soon. Can I extend it before selling my leasehold flat or house?
Most of the time, yes. By serving a section 42 notice on the freeholder two years after you have owned the house or flat, you may request a 90-year lease extension. We recommend seeking advice before serving the notice as you become liable for certain costs.
Despite not owning the property for 24 months, you are still able to apply for a lease extension, providing you have negotiated this with the leaseholder when you purchased the property to have the rights assigned to you. Freeholders and leaseholders can find a lot of useful information on the UK Government’s website and Leasehold Advisory Service.
The longer the remainder of your lease, the more valuable your home is, and you are more likely to be able to obtain a mortgage, since homes with longer leases tend to be more valuable and are more easy to sell.
What you should know about extending your lease before you sell your property
Unless you are working with a large budget before selling, extending your lease can be expensive.
You may be able to make more money from the sale of your home if you are able to afford the steps involved with extending your lease. A house or flat that has a lease left of 90 years or more may be more appealing to prospective buyers, and may therefore entice higher offers.
Mortgage lending companies may be hesitant to offer mortgages on houses or flats that have leases that are shorter than 80 years because they are worried that the value of the building might decrease. As a result, the company may not be able to provide a loan to purchase the property because the home may not provide enough security.
How is a lease extension done before selling the property?
It is best to hire a legal professional who can oversee the process if you intend to extend the lease on your property before selling it. You can negotiate a lease extension directly with your freeholder ,however it is prudent to employ a solicitor who is experienced with leasehold extensions to ensure that you are paying a fair price to extend your lease. .
The first step is to notify your freeholder under section 42. The signing of this document starts the legal process and commits you to certain costs, therefore it is imperative that professional advice is sought.
Questions to ask before extending a lease
These are the top three questions we typically receive from people looking to sell their homes to us but are unsure how leases at the property might affect a sale:
- If I don’t extend the existing lease, can I still sell my flat?
- Would a homeowner be better off extending the lease or trying to sell immediately?
- Is extending a lease before selling a property a long and complex process?
Regardless of the lease length, we can offer you cash for your property or we can assist you with funding to extend your lease prior to you selling. London is home to many complicated short leases, most of which are met by home buyers. We have experience buying homes with leases of all lengths for cash with fast and generous offers.
If you’re interested in selling your house or flat or seeking funds to extend your lease, call our expert team at 020 8175 6977 or email us info@hamiltonpaige.com or use the contact page for more details.
Learn more on
– Stopping Homeowner Repossession or Eviction
– How to Stop House Repossession & Everything you need to know
– Can You Sell a House Before Repossession?
– Selling Your House When You’re Behind on Your Payments, In Arrears & Facing Repossession
– About Mortgage Repossession
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