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How to Sell a Home with a Short Lease

If you need to know how to sell a home with a short lease, we’ve got you covered. The process is fraught with complications and potential for delay.

Mortgage providers are very strict on this issue. After all, they won’t be prepared to loan you a large amount of money to buy a house unless they know it’s definitely going to be yours for a lifetime.

What is a short lease?

A leasehold home is one that sits on land that is owned by someone else. The leasehold permits you to occupy the land for a predetermined period.

The owner of the land is known as the freeholder. And that person or organisation can decide who occupies the land — and for how long. But most leases are long-term, lasting anywhere between 90 and 1,000 years. Once the lease runs out, legal possession of the land returns to the freeholder unless an extension can be agreed.

Find out the length of your lease

Sell a house with a short lease

Access the Land Registry website to obtain a full copy of your title deeds. This document will tell you whether you own a leasehold or freehold property. You should do this before you list your house for sale.

If you have less than 80 years remaining on your lease, the value of your property could be significantly lower than the local average. And buyers will find getting a mortgage on the property very difficult indeed.

Extending your lease

If you can extend your lease, you can make your home a lot more attractive to potential buyers. It’s important to remember that owners of a property aren’t able to apply for an extension until they’ve lived there for two years.

There are two ways to apply for a lease extension when selling a home:

An extension before a sale

The buyer can make the obtaining of a lease extension a condition of sale. The owner then applies to the freeholder for the extension. But this process can take several months. And if a homeowner needs to sell a house fast, this may not be a viable option.

Seller serves a statutory notice

To speed things along, the seller can serve the freeholder with a statutory notice requesting the extension. The notice would then be passed on to the new owner upon completion. However, most sellers would only do this after contracts have been exchanged.

Selling a short lease home fast

Sell a home with a short lease

In most cases, the pool of buyers potentially interested in a short lease home is low. And this means the price can be adversely affected. Traditional estate agents will sell short lease homes, but they’ll highlight the lease issue on all their marketing materials. This will slow the process down and reduce your property’s price potential.

You also have the option of selling at auction. Once the hammer falls, a sale at auction becomes legally binding, so there’s a lower chance of the buyer pulling out because of a short lease.

But you might need to sell your home quickly. You might also want to avoid all the hassle that comes with selling a short lease home. And that’s where Flying Homes can help. We buy homes directly from their owners — in partnership with cash buyers. This means you can avoid marketing, property viewings, negotiations and collapsed property chains.

Call us today for a free, no-obligation quote. We might be able to complete the purchase of your short lease home within a matter of days.

What’s the Difference Between Leasehold and Freehold Home Ownership?

What’s the difference between freehold and leasehold?

There are several differences between leasehold and freehold ownership, and you need to know about, them before buying a new home. This issue can affect the market value of your property. And it can change the legal process involved.

We’ve put together a brief guide on the differences between leasehold and freehold ownership. Make sure you know what they mean for your future plans before buying or selling your home.

What is a freehold?

A freehold property includes ownership of both the building and the land it sits on. You’re responsible for the upkeep and management of this land.

Buying a freehold property is usually the preferred option. You don’t have to pay ground rent. You don’t have to deal with a landlord. And you don’t need to worry about a lease for the land expiring while you still own the building.

Shared freeholds

A shared freehold is something you might end up with if you buy a flat. All of the property owners in the building can get together and buy the land from the landlord. Each owner then receives an equal share of the freehold. While expensive, this course of action gives you more control over what you can do with your property.

What is a leasehold?

Differences between freehold and leasehold

A leasehold gives you ownership of a building for the duration of your lease. The land always remains the property of the landlord. And unless an agreement can be reached once the lease has expired, ownership of the property returns to the landlord.

One of the biggest drawbacks about owning a leasehold property is that you often have to get permission from the landlord to perform building work, extensions, and major renovations.

Should I be concerned that I own a leasehold property?

If your lease is coming to an end in the next few years, your property’s value will probably decline rapidly. Mortgage providers are very wary about lending for leasehold properties with less than 30 years remaining. This means you could run into difficulties if you need to sell your home for its true market price.

But there’s some good news if you already own a leasehold property. If you’ve lived in the home for at least two years, you have the legal right to request 90 years to your lease. Of course, you’ll have to pay a fair market price for this extension, but it’s usually far better than the alternatives.

Reach out to your landlord if you want to arrange an extension. It’s always better (and cheaper) to do this by agreement. However, if an accord can’t be reached, the matter might have to be settled in court.
Leasehold properties incur charges and ground rent

As the owner of a leasehold property, you’ll incur charges and ground rent during over the course of your ownership. However, the rent is usually very low — less than £100 a year.

Differences between freehold and leasehold

Particularly if you’re living in a shared building or community, you may also have to pay charges to cover the following:

  • Maintenance of communal gardens.
  • Repairs and maintenance on buildings and structures.
  • Service charges (security, reception, etc.)
  • Utility bills for blocks of flats.

What are your rights as a leaseholder?

Although you don’t own the land on which your property sits, you do have certain rights as the leasehold owner. They include:

  • You must be consulted if improvement works are to last more than a year.
  • You must be consulted if the cost of planned building work will exceed £250.
  • You have the right to see a breakdown of how your service charges are spent.
  • You have the “Right to Manage” — where you can take over management of the building along with your fellow tenants.

Don’t worry if you’ve just discovered your home is leasehold. You have several options available, including extending the lease or buying it outright. If you’d like to sell, however, Flying Homes may be able to help.

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