Selling A Short Lease Flat in Belgravia

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Flats with short leases, which are generally defined as having fewer than 70 years left on the leasehold agreement but sometimes 80 years, can be found throughout the Belgravia district of London. If you are the owner of this type of home, this guide explains why you could find that there are certain complications involved should you decide to seek a buyer for the flat.

1. What is a short lease flat?
2. Why Belgravia has a large number of flats with short leases
3. Problems with trying to sell a Belgravia short lease flat
4. Options to resolve a short lease at your Belgravia flat
5. Methods to find a buyer for a Belgravia short lease flat
6. FAQs about selling a short lease flat in Belgravia

What is a short lease flat?

Belgravia, in central London, is a popular neighbourhood with a mix of leasehold and freehold houses, flats and other properties. A freehold home is one where the owner outright possesses the property, whereas leaseholders own their home – typically flats – for a specific number of years, as detailed in a lease agreement that they sign for the property’s freehold owner.

If you’re the owner of a leasehold flat in this district, you will typically pay the freeholder a ground rent and service charges for as long as you are legally allowed to own and live in the home. Many leases run to 99 years, although some can be as long as 125 years or longer.

But you will be considered to have a short lease flat in Belgravia if the agreement has fewer than 70 years remaining on it, and in some cases the threshold is under 80 years.

The following guide explains the reason why this part of London has a history of having many short lease flats. And it also provides an explanation for why a flat with a short lease might be harder to sell, for example because it could be seen as less valuable to buyers than a flat in the same area that has a lease with many more years remaining on it.

You’ll also get tips on different options for how to fix a short lease at your Belgravia flat, as well as advice on the best ways to seek a buyer for the home if that’s what you decide to do.

Why Belgravia has a large number of flats with short leases

Although you can find short leasehold flats in many parts of the UK, London’s unique history of land ownership helps to explain why the amount of these flats is particularly large in the city.

Beginning in the 18th century, there were a number of family-owned estates that started to build homes on the land. In Belgravia, this included the Grosvenor family estate that developed a large number of properties in the district, including leasehold flats, in the 1800s. The area has developed over the years into one featuring many prime residential and commercial properties.

The estate, which is now managed by the Grosvenor company, includes many flats, some that started with typical lease lengths of 99 or 125 years, but others that were specifically given short lease terms, in some cases as few as 20 years. Even those flats that had the longest possible leases are now nearing the point when they’ll drop under 70 or 80 years and be seen as short leases.

Problems with trying to sell a Belgravia short lease flat

Although Belgravia is an upscale and in-demand neighbourhood for homebuyers, you could still encounter some difficulties when attempting to sell a short lease flat located here.

Short lease properties can be harder to sell because buyers that need to get a mortgage to afford purchasing this type of home might struggle to get approved for the loan. In a recent article, Clifton Private Finance explains that shorter lease properties – in its definition, those with less than 80 years left on the lease – might not be eligible for mortgages.

That’s because many mortgage providers will have serious concerns that it could be difficult to resell the flat, should they have to do so in the future. If someone takes out a home loan but then defaults on the repayments, a lender can move to repossess the property and then attempt to sell it, in order to use the sale proceeds to recoup the remaining mortgage debt amount. If a lender fears they won’t be able to resell a short lease flat, they may deny the mortgage application. And that would prevent buyers from being able to afford purchasing your flat.

Separate from any mortgage complications, short lease flats might also be less desirable to potential owners because of doubts about the longevity of their ownership. It’s possible that they might not have the desire, time or funds to pursue what could be complex and expensive negotiations to try and secure a lease extension as the next owner of your flat.

Options to resolve a short lease at your Belgravia flat

Despite the potential hurdles involved with attempting to find a buyer for a short lease flat in Belgravia, there are a few different options available for how to resolve this scenario. You could attempt to buy the flat freehold, seek a lease term extension, or try to sell your flat.

Making a selection of the following steps forward will be a choice you’ll have to make based on your unique circumstances, including your available budget, time and other factors.

Purchase the freehold for your flat

This will likely be the most expensive option but it would give you the most legal authority over the flat. You would approach the freehold owner of the property and see if they would be willing to sell it to you. If they agree, and you can agree on a price, this would transfer the freehold to you and therefore eliminate the flat being subject to any lease agreement.

But beware that the freeholder might ask a very high price for the property that is beyond what you can spend. Alternatively, they may have zero interest in selling the freehold.

Ask the freeholder to extend the lease

A lower-cost option is to get in touch with your freeholder to ask whether they would be willing to extend your lease agreement by a certain number of years. Depending on the extension that you are able to get, this could turn your short lease flat into one that is seen as a long lease.

There are however some complications involved with this, including that your freeholder might be opposed to extending the lease for many years. And even if they are open to negotiating a lease extension, you could find that the costs and complexities involved are too much.

Seek a buyer for your short lease flat

The third option is to decide to try finding a buyer for your Belgravia flat with the lease left with its current amount of years, and this creates its own issues that you should consider.

Certain buyers may be less interested in making an offer on a short lease flat, so that’s something to bear in mind as you weigh the various options for how to sell the property. In the next section of this guide, you can learn more about the strategies that you can choose from.

Methods to find a buyer for a Belgravia short lease flat

After reviewing your options for how to possibly resolve your short lease flat in Belgravia, if you settle on wanting to sell the property then you have a few different ways to proceed.

You could attempt to find a buyer for the flat through a property auction, you could enlist the support of an estate agent, you could sell to a quick home buyer like LDN Properties, or you could try to sell on your own. All four options have their unique advantages and disadvantages, which you can read in brief summaries of the methods below. Be sure to review what to expect from the various choices before making a final decision on which way you want to sell.

Finding a buyer through a property auction

Property auctions are an uncertain way to sell a flat because you might not get any bids on your home, meaning it doesn’t sell. You’d then need to start over with seeking a buyer, adding much more time to your selling schedule. Even if you do manage to sell your flat this way, you should be prepared for the entire timeline to be at least a few months and potentially longer.

Or you could get a single bid at the reserve price, which is the lowest price you agree your home can sell. A bid at this level is a legally binding sale, so be sure to set a reserve price that should still generate a profit even after you have paid the auctioneer their fees. There are some auctioneers that might agree to have the winning bidder pay a share of your costs, so you could inquire about this because that would help with reducing your overall expenses.

Check with specific auctioneers about whether they have successfully sold short lease flats before. If they have never sold this type of home in previous auctions, this suggests that they might struggle to know how to generate interest from buyers in your short lease flat.

The auctioneer charges commission to cover their work in selling your flat, which starts with putting together a listing that describes the home and includes photographs of the interior and exterior, advertising the listing, hosting the auction and overseeing a successful sale.

Enlisting the support of an estate agent

Estate agents are another method of selling your Belgravia flat that will mean you don’t have to put in much effort to find a buyer. The estate agent will take on responsibility for creating and advertising a listing, arranging viewings to give prospective buyers the chance to tour your home, hearing offers from buyers and trying to guide one to the exchange of contracts.

Just beware that this can be a slow way to sell a home, in some cases taking many months or even more than a full year. And you could get a serious offer from a buyer that later changes their mind and rescinds it, causing the sale to collapse. You would then need to begin again with searching for another buyer, which could add much more time to your selling calendar.

And if an estate agent succeeds in selling your home, you will have to pay them commission that will be subtracted from the eventual sale proceeds. If one of your main aims with selling your flat is limiting your expenses, you might want to consider another method.

Always inquire with individual estate agents about their past success in selling short lease flats, particularly those located in Belgravia. Any estate agent that has never sold such a home before could find it hard to know how to generate interest in your flat from potential buyers.

Selling to a quick home buyer

Another option for selling your flat is to get in touch with a quick buyer, like LDN Properties. These companies make quick and fair offers to buy almost all types of homes, even those that may be seen a more difficult to sell such as a flat with only a short lease remaining.

The process of selling a flat to a quick buyer is simple, hassle-free and zero-stress, starting when you call them to discuss your home. In less than an hour, they should be able to make a tentative competitive offer for buying the flat, and you’ll have at least a week to consider it.

Should you accept that initial offer, the quick buyer will then arrange for a staff member to set a time and day to visit your home, so that they can inspect the interior and exterior before the company makes its final offer. This is the only viewing that would be needed when selling this way, whereas you could need dozens or more viewings when selling via other strategies.

If you then accept the quick buyer’s final offer, they will work speedily with your solicitor or other legal representative to sign the required documents and handle the other actions needed to complete the purchase of your flat. The entire schedule from the beginning to the end should only be a handful of weeks, and that covers the exchange of contracts and paying you the full proceeds. That’s often far quicker than the three alternative ways for selling a flat.

In addition to providing you with a rapid sale, honest quick buyers like LDN Properties never charge sellers commission. This ensures that you will get to minimise your expenses whilst also being sure of getting the total proceeds from the sale. For those homeowners who want to reduce their costs with selling, this can make a quick buyer a good selection.

Trying to sell on your ownership

Or you could try to sell your Belgravia short lease flat on your own, although this will require that you take care of all the steps for finding a buyer. You’ll need to create and advertise a listing, schedule viewings, hear offers and attempt to get one through to exchanging contacts. This will be a very time-consuming amount of work and it can quickly become quite stressful.

This can take many months, and even if you get a legitimate offer, the buyer could later decide against it and withdraw it. They’re legally allowed to do this without any consequence if contracts are not yet exchanged. The sale would then fall apart and you would need to start over with looking for another buyer, likely adding significantly more time to your selling schedule.

Perhaps the only clear advantage of selling a short lease flat on your own is that you would not have to pay any commission to an auctioneer or an estate agent, so you will avoid that cost. But you might find that any financial saving you make as a result ends up being cancelled out by the funds you will need to spend on advertising your listing and various other selling steps.

✅What does it mean to own a short lease flat in Belgravia?

Leasehold flats are those where you own the home for a set number of years as detailed in your lease agreement that you sign with the freeholder, who is the outright owner of the property. If your flat in Belgravia has a short lease, this typically means that is has less than 80 years left on the agreement, although sometimes a short lease is defined as having less than 70 years left.

✅Why does Belgravia have so many short lease flats?

It’s because of the lengthy and unique history of property development throughout London’s history, which included several estates that built homes, such as the Grosvenor family that constructed many flats in the Belgravia neighbourhood. Some flats started with short leases, others had standard leases that have run so many years they are now short leases.

✅Is it true that selling a short lease Belgravia flat can be difficult?

Yes, there are a few explanations for why attracting buyers to a short lease flat can be harder. Some buyers might be concerned about the short duration of ownership and uncertainty about being able to get a lease extension. Other buyers might not be able to get approved for a mortgage to purchase the flat, due to the lender’s concerns about this type of property.

✅What are my options for resolving a flat with a short lease?

You could ask the freeholder of the flat if they are willing to discuss extending the duration of the lease, although this could be a long and expensive process. Alternatively, you could attempt to buy the freehold of the property. Or you can instead decide to sell the flat without changing the short lease, for example to a no-fee quick home buyer such as LDN Properties.

✅What options do I have for how to sell a Belgravia flat that has a short lease?

There are a few different ways that you can try to find a buyer for the flat, and they include trying your luck at a property auction, enlisting the support of an estate agent, attempting to sell the flat without any help, or selling to a zero-commission quick buyer like LDN Properties. All four methods have their own pros and cons that you should review before making a decision.

✅How quickly will I be able to sell my short lease flat in Belgravia?

It depends on which strategy you use for selling, because it will likely only take a few weeks if you opt for selling your home to LDN Properties – and that timeline includes the exchange of contracts and paying you the sale proceeds. Selling via an estate agent, an auctioneer, or without any third-party help could all take several months and sometimes even longer.

✅Which options for selling a Belgravia short lease flat charge commission?

If you use the support of an auctioneer or an estate agent to sell your short lease flat, you will have to pay them commission and this will increase your selling costs because it will be deducted from the eventual sale proceeds. But you will not have to pay any fees if you sell your flat without any help or you sell to an honest no-commission quick buyer like LDN Properties.