Selling a Leasehold Flat

Legacy_user

My lease has under 60 years to run which I understand makes it difficult for people to obtain a mortgage, I have been told it would probably have to be a cash buyer. True or not - any part of that sentence? I am reluctant to purchase an extension to the lease in case that involves any changes to the lease itself or to the Maintenance Charges. The cost of extending the lease is beyond my limited means, as a pensioner with limited savings, but maybe not excessive to a purchaser. I understand a buyer might try to reduce the asking price to cover the cost of extending the lease but again, I cannot afford to do that. Any useful responses out there?

sal_III

What do you mean by

buyer might try to reduce the asking price to cover the cost of extending the lease but again, I cannot afford to do that.

Are you trying to sell at a price of similar flats in the area with longer leases? If so, why do you think anyone will go for it?

Why can't you afford to lower the price to reflect the short lease, are you in a negative equity?

Bottom line is you won't be able to get the full market price with 60 years left on the lease, no matter if it's a cash buyer or someone with mortgage from amendable lender.

2bFrank

I agree with Sal. No one in the right mind will buy your flat at the normal price, when there are only 60 years left on the lease.

Might be worth finding out how much a lease extension will cost, then you roughly know how much discount you need to give from your flat and you can work out if the figures are worth while for you. If they are not, you are a pensioner and 60 years is a long time, you might not need to worry about it.

eddddy

• It would be extremely difficult for a buyer to get a mortgage on a flat with less than 60 years left on the lease.

• A flat with a 60 year lease will be worth a lot less than a similar flat with a long lease (say 85+ years).

• If you start with the value of a long lease flat, unfortunately you would probably need to discount it by the cost of the lease extension, discount it a bit more because it's unmortgageable, and discount it a bit more because of the hassle of getting a lease extension.

Ask some experienced local estate agents for their opinion on what it would sell for.

Things you could do include:

• See if your freeholder would do a deal to give a "lease extension on completion". i.e. The buyer pays a chunk of money to you for the flat, and a chunk of money to your freeholder for the lease extension.

• Tell prospective buyers that you're happy to serve a lease extension notice on the freeholder, just before completion. That means they can get a lease extension quicker - without waiting 2 years.

System

Thanks for your comments.
1) I have just submitted a further post about price comparison with another new complex locally.
2) I mentioned in this post that I am a pensioner with limited savings (and income) which explains why I cannot really afford to lower the price if I can possibly avoid it. I know I might have to though.
3) My flat is wholly my own - mortgage paid off in full some years ago.

System

Thanks for your comments.
1) I know how much a recent lease extension on another flat in this complex cost and I cannot afford it, or to reduce my asking price by that amount.
2) I find your comment about 60 years remaining on my lease and the fact that I am a pensioner and therefore I do not need to worry about it rather offensive. You do not know all of my circumstances and my reasons for wanting to move. I suspect you are probably rather young.

System

Thanks for your comments.
Yours is by far the most useful reply to date, and most polite too.
I like the last part of your reply and will bear that in mind. They are options I was not aware of.

Tom99

Hardup49 wrote: »

Thanks for your comments.
1) I know how much a recent lease extension on another flat in this complex cost and I cannot afford it, or to reduce my asking price by that amount.
2) I find your comment about 60 years remaining on my lease and the fact that I am a pensioner and therefore I do not need to worry about it rather offensive. You do not know all of my circumstances and my reasons for wanting to move. I suspect you are probably rather young.

You are wanting to sell a 60yr lease for the price for a 100yr+ lease which is not going to happen. If you want to sell the property you are going to have to ask a price at least the cost of the lease extension less than the price of your flat with a long lease.
This probably means at least 15%-25% less.
Its the same as owning a freehold house worth £100,000 but saying you cannot afford to sell it for less than £130,000, on-one will buy it.

Davesnave

Hardup49 wrote: »

2) I find your comment about 60 years remaining on my lease and the fact that I am a pensioner and therefore I do not need to worry about it rather offensive. You do not know all of my circumstances and my reasons for wanting to move. I suspect you are probably rather young.

I am a pensioner and I find 2BFrank's answer sensible and not in the least offensive.

If you cannot extend your lease and won't reduce the price to a level which reflects the need for an extension, then you are not going to sell. The other circumstances then become irrelevant.

G_M

I find your posts grading the quality of replies (as you see them) offensive.


People are offering their time and experience for free, and if a little light humour is thrown in at the same time, you should recognise and accept it.


Your age is irrelevant; it does not excuse your rudeness to 2bFrank. Nor does it affect the market value of your lease.


If you cannot afford to sell at the market value (which will be reduced comparative to similar properties with longer leases), then you will have to keep the property.

System

Thanks for your comments.
I do seem to have a problem in finding out how much one of these flats that now has an extended lease would cost to buy these days. I am only being given a value of what my flat is worth as it stands.