Next two years - let to rent or buy? Lease extension?

chrishar

I own a short lease flat (62 years left) and let it out. 3 months ago i decided to sell it and as part of the the lease would be extended. I've had no offers though despite dropping the price.

In addition to this the tenant doesn't want to leave and pays the rent fine. So I am now left with two options, as I also need a place to live instead of living in shared rooms but I don't want to live in my flat.

NatWest will give me buy to let mortgage up to 75% , which gives me 60k cash. Do I:
1. Buy another property using 50k as a 25% deposit and 10k for SD and fees and live in the new flat.
2. Use 20k of the cash to extend the lease on my let flat and use another 20k to rent somewhere myself for 2 years.
Any ideas which of those is better?

Pixie5740

My advice is the same as in all your other threads about this leasehold property. Extend the bloody lease because it's only going to get more and more expensive, or price the property to sell.

chrishar

Hi pixie
The last advise I received was sell and buy somewhere I want to live.
I have been trying to do just that to no avail. I took the estate agents advise on the price and a few weeks ago dropped it down a little still no offers.
My options above aren't ideal I just wanted to know the best one of the two.
So you say extend the lease and rent for two years ( as I would be locked into a 2 year Btl mortgage.).
Thanks for that advice.
I could use credit cards for the lease and save Re-mortgaging is that an option?
My loan is currently 71 k on 3.89 and 5%. A remortgage would be around 2.54-2.69% depending on valuation (ltv either 70 or 75%)

danslenoir

There are three ways you can make your property more sellable.

-Extend the lease

-Get rid of your tenants before trying to sell. A lot of non-investor buyers would be put off by tenants when there is no guarantee you will be able to make them leave by when the time comes to complete on the sale. Vacant posession on completion is required by most (all?) residential mortgage lenders.

-Lower the price further. Every property will sell at the right price.

always_sunny

How much rent do you get? Or what's your yield?

Start extending the lease and you can always transfer that to the seller and you could even move in temporarily. If you buy another property and keep the existing one won't you face higher SDLT rates?

Pixie5740

If you're determined to keep hold of the property, then as recommended in all your other threads, extend the lease sooner rather than later. The longer you dither around the more it's going to cost you.

Priced correctly anything will sell and you've already been told that before too.

chrishar

Hi, the rent I receive is 9000 a year and with the 62 my valuation is 180000 done by NatWest valuer.

marksoton

We're just going round and round in circles here.....

csgohan4

Omg OP, extend the lease as advised from your previous posts.


Most mortgage lenders do not lend on properties less than 80 years and hence your property has a markedly reduced population to sell to cash buyers only.


Burying your head in the sand will not increase the value of your property and get rid of the tenants since they don't want to leave.

jonathanrolande

Think you need to seek advice of a financial advisor for such a big decision.

chrishar

Thanks for the advice