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
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
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.