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April 26

How Do I Sell A Short Lease Property?

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The rising popularity of serviced apartments attracts guests seeking hotel-like comforts while maintaining their privacy. To stand out among the competition and increase profitability, it’s crucial to enhance your marketing strategies for your multiple properties in town.

Selling a short lease property, typically with less than 70 to 80 years left, can pose challenges. However, there are strategies to secure a sale at a fair price.

 

What is a property with a short lease?

If you reside in a leasehold property, be it a house or a flat, ownership of the building lies with someone else, known as the freeholder. As the leaseholder, you enter into an agreement with the freeholder, detailing the duration—typically 99 years—during which you have the legal right to occupy the property in exchange for paying ground rent.

Lease terms can vary, with some extending beyond 125 years. However, a lease is generally considered short if it has less than 70 years remaining. Some lenders now classify leases with less than 80 years left as short, impacting mortgage eligibility.

 

Potential problems with trying to sell a house or flat with a short lease

If you’re aiming to sell your property but it falls under the short lease category, expect challenges in finding buyers. Short lease properties are less appealing to potential purchasers due to their limited lease duration, a factor considered by organizations like the Leasehold Advisory Service.

Securing a mortgage for such properties poses hurdles, as lenders typically prefer leases to exceed the mortgage duration by 25 to 30 years or more. Consequently, the shorter the lease, the tougher it becomes to sell the property.

 

Suggested solutions for selling your home when it’s on a short lease

If you’re a short lease property owner looking to sell, don’t be deterred. Selling a short-term leasehold property is feasible, whether you’re relocating due to changes in housing needs, employment, or financial circumstances.

One approach to address selling hurdles is negotiating with the freeholder to extend the lease duration. Extending the lease renders it more attractive to buyers, potentially facilitating mortgage approvals. However, lease extension negotiations can incur significant costs.

Alternatively, you could explore the option of purchasing the freehold from the freeholder. While this route offers more control over the property, it often comes with a hefty price tag, especially for standalone houses.

A third avenue involves selling to a quick home buying company specializing in prompt cash purchases. These companies, often found online, provide swift transactions without charging fees. Ensure the company is reputable by checking membership with regulatory bodies like The Property Ombudsman, offering a speedy resolution to selling dilemmas.

 

FAQs about trying to sell a short lease house or flat

You might have concerns about selling your short lease home, and if so we hope these frequently asked questions, and our answers to them, will help you:

 

Will it be impossible to sell a short lease home?

While securing a buyer with a mortgage for a short lease property may pose challenges, selling options still exist. Consider avenues like extending the lease before selling or opting for a quick property buyer.

 

Why don’t mortgage lenders like short lease properties?

Lenders typically prefer leasehold properties with over 25 to 30 years remaining after the mortgage term. Short leases may not meet these criteria, making them less attractive to potential buyers.

 

Will it cost me money to sell my home?

Selling a property with a short lease doesn’t always require hefty expenses. While options like lease extension can be costly, selling to a quick home buyer entails no fees, ensuring you retain all the sale proceeds.

 

 

MORE Property blogs HERE: 

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Cashing Out of Buy To Let? Top Places to Make a Quick Sale

Buy-to-let Home Insurance UK

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Is Buy-to-Let Still Profitable Today?

A Comprehensive Guide to Buy-to-Let Mortgages

First-Time Buyer’s Guide to Buy-to-Let Mortgages


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How Do I Sell A Short Lease Property?, Potential problems with trying to sell a house or flat with a short lease, What is a property with a short lease?


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