As a
leaseholder, a short lease is a potentially critical threat to your chances to
selling your property. It's a problem that could affect over a million property
owners in England and Wales. Ownership
of a leasehold flat effectively means that you are granted a long lease from
the freeholder. This means that
you own the right to live there by definition of your lease, and the demise of
your flat, however not the absolute ownership of the land or building as
usually the building will contain various flats also on leases. Scotland and
Northern Ireland have different leasehold laws.
But if
you are a leaseholder in England or Wales, are you able to extend your lease,
and if so, by how many years, and would this be worthwhile? After all, you could opt to sell a flat with a short lease to a company like Dream House Buyer,
which can give you a cash offer
for your flat, irrespective of the length of the lease. The 1993 Leasehold Reform Act means
that most flat-owners are legally entitled to add the customary 90 years to their
lease at a fair market price, as long as they have lived in the flat for two
years.
Given
that shorter leases generally decrease the price at which you can expect to
sell the property on the open market, extending a short lease can be a good
move - but it depends on several factors including: The exact current length of
lease, value of the property, service charge and exact terms of the lease. There isn't much reason to worry if
you're staying put and the lease is 90 years or more, and if you extend a lease
of this length, the value added to your flat may barely exceed your outlay. But
by the time the lease reaches about 83 years, you should seriously consider
extending or selling.
80 years
is the critical number. At this stage, you have to pay not just the usual lease
extension price, but also 50 per cent of the flat's 'marriage value' - the
amount of extra value that would be added to your property by a lease
extension. The big difference between extending at 81 years and 79 years is
what leads so many people to sell
a flat with a short lease to a firm like Dream House Buyer whom are specialist buyers
of flats with short leases. Dream house Buyer buys short lease flats for cash,
which means that they do not have to satisfy a mortgage lenders criteria.
The
aforementioned two year ownership condition for extending should make you
especially wary of buying a property with a lease of 80 years or less - however easy the estate agent
insists extending would be. If your lease has dropped to less than 60 years,
you can expect an extension to cost tens of thousands of pounds. In this situation, it is vital to seek
good legal advice from a solicitor, and a valuation from a RICS chartered
surveyor who specialises in lease enfranchisement and extension valuations.
For those
who do decide to sell a flat with a short lease of under 75 years, Dream House
Buyer will happily make an offer on the same day of contact, before purchasing
the lease in its current form.
Dream House Buyer (http://www.dreamhousebuyer.co.uk/)
is a family owned property company that considers all types of property, and we
buy property with sitting tenants too. We will make an instant cash offer for
any property in the UK, regardless of the size, location, condition or value.
We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property. We also buy ground rents and portfolios. If you think we can help, then please invite us to make you an immediate cash offer for your property.
Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk
We will buy any property that you might consider a problem - including property with sitting tenants, flats with short leases, problem tenants, unmortgageable and structurally damaged property. We also buy ground rents and portfolios. If you think we can help, then please invite us to make you an immediate cash offer for your property.
Contact us on 0800 1577 497 or email us info@dreamhousebuyer.co.uk
No comments:
Post a Comment