July 1

How Hard Is Selling A Leasehold Property?


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Selling a leasehold property involves additional steps compared to a freehold sale, and it’s important to be aware of potential issues that could complicate the process. Here, we outline these challenges and provide solutions, alongside an overview of the sale procedure, associated paperwork, costs, and expected timeframes.

When selling a leasehold property, you will encounter more paperwork and requirements than with a freehold sale. These extra steps include obtaining a management pack from the freeholder or managing agent, which contains essential details about the lease, service charges, and any planned works. Ensuring this information is accurate and up-to-date is crucial to avoid delays and complications in the selling process. Proper planning and organization can help you navigate these additional requirements smoothly.

You’ll also need to address potential concerns from buyers regarding the lease, such as the remaining lease term and ground rent. Buyers might be wary of properties with shorter leases or escalating ground rents. To address these issues, consider negotiating a lease extension or providing clear information about any plans to extend the lease. Additionally, be prepared to handle queries about the service charge history and any upcoming maintenance costs. By proactively managing these aspects, you can make the selling process more straightforward and attractive to potential buyers.


The key steps to selling a leasehold property


Find an Estate Agent: Choose a few local estate agents who specialize in selling flats like yours. Invite three agents to evaluate your property and discuss pricing. Once you have their opinions, negotiate their fees and select your preferred agent.

Prepare Documents: Gather essential documents, including a copy of your lease. Check how many years are left on the lease. If it’s less than 90 years, consider extending the lease before selling. Refer to our guide for a full list of necessary documents.

Notify Your Freeholder: Inform your freeholder about your intention to sell. While not mandatory, giving them a heads-up can expedite the process when your solicitor reaches out.

Appoint a Solicitor: Hire a conveyancing solicitor early on to avoid delays. Ensure they have experience with leasehold transactions.

Receive an Offer: Once you get an offer, the sale process can begin in earnest.

Respond to Queries: Fill out a leasehold information pack and the usual seller’s pack. Answer any buyer queries through your solicitor quickly.

Exchange Contracts: Sign and exchange contracts with the buyer to secure the sale.

Completion: Finalize the sale, vacate the property, and hand it over to the new owners.


What is a leasehold property?

Leasehold properties, mostly flats, are estimated by the Government to number about 4.98 million in England, with around 70% being flats and 30% houses.

When purchasing a leasehold property, you acquire the lease from the freeholder for a specified period. You do not own the land your home is on; you have the right to use it for the duration of the lease.

Lease lengths vary. Typically, they range from 90 to 120 years, though many new builds come with 999-year leases. For more details, see our guide on the difference between leasehold and freehold. Leasehold properties generally have more ongoing costs compared to freehold properties, including maintenance fees and an annual service charge.

If your lease is shorter than 80 years, it can pose challenges when selling the property, which we’ll discuss below.

Significant leasehold reforms are currently in progress in the UK. These reforms aim to make extending your lease or purchasing the freehold easier and more affordable. They also seek to streamline the sale process by capping the time and fee for obtaining information from the freeholder. If you own a leasehold property, sign up for our newsletter to stay updated on these changes and their implementation.


Can I sell my leasehold property?

As a leaseholder, you can sell your home at any time during the lease period. Essentially, you are selling your lease to another buyer while the building itself remains owned by the freeholder.

If your lease terms, such as a high service charge, make your property hard to sell, you might consider joining other leaseholders to purchase the freehold. Owning a share of the freehold can make your property more appealing to buyers, as it gives you control over the costs.

Selling a property with a short lease (less than 80 years) can be challenging because buyers may have difficulty securing a mortgage. Additionally, extending a lease becomes more costly once it drops below 80 years, as the freeholder can charge extra. If your lease is nearing or below 80 years, think about extending it before selling.


Is it harder to sell a leasehold property?

Generally, selling a leasehold property is not difficult as long as the lease has more than 90 years remaining. Buyers interested in flats will often be looking at leasehold properties, so getting an offer should not be a problem.


The things that could make it harder to sell a leasehold property, apart from a short lease, could include:

High service charges, ground rents, or fees can deter potential buyers. Be transparent about these costs to avoid complications later in the sale process.

Clauses in the lease, such as restrictions on flooring types or noise levels, are common. However, more restrictive rules on property use may put off some buyers.

Cladding issues have become a significant concern, especially since the cladding scandal. Homeowners have faced large bills and struggled to sell properties with unsafe cladding. Progress is being made with cladding safety, and EWS1 forms are aiding in this process.

An absent or inactive freeholder can complicate the sale. This is a known issue that needs attention.

Selling a leasehold house, especially if it should have been freehold, can be challenging. Some new builds were sold as leasehold, and their freeholds were bought by large investors who now demand high sums. Our guide on managing a leasehold house provides advice on your options.


How can I make selling a leasehold property easy?


Planning Ahead for Selling a Leasehold Property

Selling a leasehold property can be straightforward with some forward planning. Here’s how to address common challenges:


Dealing with a Short Lease

If your lease has less than 90 years remaining, it may deter buyers. A lease under 80 years can be costly to extend and may make it difficult for buyers to secure a mortgage. While selling with a short lease is possible, it often reduces the property’s value.

To make your leasehold property more attractive, consider extending the lease before listing it or at least start the process. Although this involves an expense, it simplifies the sale. For more details, see our step-by-step guide to extending a lease.


MORE Property blogs HERE: 

Buy To Let Defaults Surge with Rising Rates

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

Buy-to-let Home Insurance UK

Why Are Buy-to-Let Mortgages Interest Only?

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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