Leasehold Property

Discodave1987

Hi All

I would like some advise if possible please.

I'm currently purchasing a property which is Leasehold and has 60 years left to run on the lease.

Would anybody have any major concerns about this or has anyone had any experience along these lines.

Any advice would be much appreciated.

Thanks

Dave

hazyjo

Will you be requiring a mortgage for the property? If so, that's likely to be a problem with only 60 years left...

Jx

diable

Give us more info and we may be able to advise, unless the property is cheap with an option to extend the lease or to buy the freehold then I wouldn't bother.

Officer_Dibble

Not necessarily a problem, but partly depends where it is. If it's in Central London, for example, leases of 60 years or less remaining are very common. Your choice of mortgage lenders will be reduced - eg some insist on 50 yrs unexpired lease after the term of the mortgage.

The price you're paying SHOULD be slightly less than the estimated cost of the property if it had a 99+ year lease minus the expected cost of extending the lease (which you'll be able to do after 2 years of ownership). This doesn't always work in Central London, as there are too many rich overseas cash buyers who don't quite understand the system!

Richard_Webster

60 year leases are mortgageable with a few lenders now as Halifax/Lloyds C&G and Bank of Ireland all require a minimum of 70 years. Even if you get a mortgage now you will almost certainly find your buyer won't and you will have to extend the lease to sell.

You have to ask this question:

If the seller could get more for the property by extending the lease wouldn't he do so?

He could do a deal with the freeholder to do the transaction back to back so the lease is extended using the part of the sale proceeds and you get the newly extended lease transferred to you.

The estate agents will probably wildly underestimate the cost of a lease extension and tell it will be no problem - of course they will - they want to sell the flat!

If he can't get a lease extension easily it suggests that when you want to do so 2 years down the track you will have a problem.

You have checked that the freeholder is contactable and hasn't disappeared, or being a company got itself dissolved, haven't you? Or is it a shared freehold and one of the shared freeholders has gone AWOL?