Selling a Short Lease Flat
Short lease flats are those that generally have less than 70 to 80 years remaining on the lease agreement, and you might find there are extra steps needed to sell this type of home.
Your top questions when selling a short lease flat
✅ When are leasehold agreements considered to be short?
When you purchase a leasehold flat you will sign an agreement with the freeholder who owns the block of flats in which the unit is situated, and the land on which it is located. Lease agreements typically last from 99 to 999 years but they are considered to be short if they have less than 70 years remaining, or less than 80 years in the view of some mortgage lenders.
✅ Why are mortgage providers reluctant to give loans for short lease flats?
Because these properties are seen as less desirable for buyers than flats which have many years left on the lease agreement. If the person that buys your flat then defaults on the mortgage, the lender might have concerns that the unit will be difficult to sell because of the short lease and then they may struggle to recoup the remaining debt they’re owed.
✅ Should I try to extend the length of my flat's lease before seeking a buyer?
It’s certainly an option but you should be aware that the process of trying to extend a lease agreement with a freeholder can take a very long time and also cost thousands of pounds. That won’t be a great solution for those owners of a flat who need to sell quickly and who do not want to incur any more costs before they attempt to find a buyer for the property.
✅ Do I need to fix structural problems with my short lease flat before selling it?
If your flat has an issue like dry rot or damp and you would like to spend time, effort and money on fixing it before selling then this can be one way to avoid buyers viewing the property as less valuable. However, many owners simply won’t have the resources to do this work, and so you they should sell to a quick buyer who can give them a competitive and swift offer.
✅ How much will I pay in Capital Gains Tax when selling my short lease flat?
If you lose money on the sale compared to your initial purchase price then you typically won’t pay any Capital Gains Tax, and the same often applies if you break even by selling it close to the price that you first paid for the property. Make sure you obtain professional tax advice with regard to Capital Gains Tax.
✅ Which methods of selling my short lease flat will require that I pay commission?
Selling via an estate agent or auctioneer both require that you them commission for finding a buyer for your short lease flat, and this will increase your selling costs because the fee will be deducted from the final sale proceeds. By contrast, you won’t have to pay any fees if you sell on your own or you sell to an honest no-commission quick buyer such as LDN Properties.
✅ What is the swiftest method available for selling my short lease flat?
The speediest way to find a buyer for your short lease flat can be to contact a quick buyer, because these companies have the funds available to buy homes immediately and they can finalise the process of buying your home within weeks. But if you decide to sell on your own, via an auction or with an estate agent then you can expect the timeline to be at least many months.
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