Advice re Freehold and Leasehold Property

critchley999

We bought a leasehold flat years ago. It's one of those houses converted into 2 flats, not purpose built. The freehold belonged to the downstairs flat who we paid £10 a year to.

When the downstairs flat became vacant we also bought that as an investment and we rent it out. So now we are the freeholders and the leaseholders.

Does that mean we can grant ourselves a new longer lease on the upstairs flat ? We have it in mind to sell both properties when we're both retired and buy a small bungalow and was just wondering how we stand with extending the lease on our flat to make it more saleable?

Richard_Webster

Unless you need to raise money on the flats by remortgage, when sometimes because of the peculiar requirements of BTL mortgage lenders, you have to create leases, you do not have to do anything at all until you want to sell.

Then you grant a new lease of the flat to the buyer - you do not have to create a lease to sell it - you create a lease when you sell it.

olly300

I would sell both flats with a equal share of the freehold. (They tend to be more expensive.)

You would need to get a solicitor involved to do this but it's only important to do it when you decide to sell one or both of them.

critchley999

Richard_Webster wrote: »

Unless you need to raise money on the flats by remortgage, when sometimes because of the peculiar requirements of BTL mortgage lenders, you have to create leases, you do not have to do anything at all until you want to sell.

Then you grant a new lease of the flat to the buyer - you do not have to create a lease to sell it - you create a lease when you sell it.

Aah yes, thankyou, I can see what you mean. I just remember seeing in adverts "with new 999 year lease" or whatever but I suppose we could still advertise it as such and then, as you say, extend the lease at the time of the sale.

Olly300 wrote:

I would sell both flats with a equal share of the freehold. (They tend to be more expensive.)

You would need to get a solicitor involved to do this but it's only important to do it when you decide to sell one or both of them.

Would definitely need to consult a Solicitor on that one. I'm not very clued up on the whole freehold/leasehold thing. I remember some time ago a friend had trouble getting a mortgage on a freehold flat - not many lenders were willing i.e. they preferred leasehold.

Not sure how shared freehold works.

Also believe that we'll be liable for a wadge of Capital Gains Tax on the flat we rent out if we sell, as it's not our own residence. I don't suppose there's any way round that.

It's not that long til we retire and I'm not looking forward to trying to co-ordinate the sale of the 2 flats and purchase of a bungalow Can see it being a bit of a nightmare.