Buying or selling a leasehold property

Short lease?

When purchasing a leasehold property, your solicitor should advise you on the terms of the lease, the ground rent and how long is left. The agent does not always do this and are sometimes wrongly advised by the vendor.

When leasehold properties have 90 years or less, the value of the lease decreases and at 80 years it becomes significantly more expensive to extend the lease.

If you are thinking of buying a leasehold property with less than 90 years remaining, it may still be a good investment at the right price, however, the price you pay may itself impact on the cost of the extension.

You will only have the right to extend the lease if you have been the registered owner for 2 years.

One way around this is if the vendor is a qualifying tenant, they can serve a Section 42 notice and transfer this with the sale, so you do not have to wait two years.

We recommend you have a valuation undertaken to ascertain the current value of the property, the likely cost of the lease extension and the value once the lease is extended.