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Why you may be tempted to purchase a short-leasehold home Fri, 18 Jul 2014 14:27

Dream House Buyer receives many enquiries from those who are struggling to sell leasehold flats on the open market, due to the leases of less than 75 years that make them unattractive to many prospective buyers. Those looking to sell a flat with a short lease can receive a cash offer for their property from Dream House Buyer, irrespective of the length of the lease.

 

For some buyers, however, a short-leasehold property may still be a tempting prospect. There are clear risks attached to properties with extremely short leases, but they are also often infinitely more affordable to purchase. If the property in question has a desirable postcode, potential buyers may be willing to take on the considerable challenge and expense associated with extending the lease, even to the point of doing the majority of the paperwork.

 

But those who do successfully extend the lease on such a property may still be able to command a healthy premium when the time comes to sell, even if experts are divided on the actual profits that may be possible. Nonetheless, for those who above all else would like a prestigious address, there are many properties with short leases, in smart areas of London like Kensington and Chelsea, that may interest them.

 

There are obvious issues for those who do take the plunge, including obtaining a mortgage. Those looking to buy in prime central London, in particular, can expect to be rejected by any high street bank, making it necessary to have cash or a loan from a good broker. If you do find the money, however, even a property with a short lease could prove decent value.

 

Before you purchase, ask an expert for their view on how expensive it will be to extend the lease, before looking at the going prices for nearby long-lease properties. You can then calculate the ultimate cost of your short-leasehold home purchase. It does help that the prices of such homes are reduced by a shortage of potential buyers, with foreign buyers often finding leases too difficult to understand, and others simply expecting the lease extension process to be too much hassle.

 

It is advisable to avoid buying a lease of less than 40 years, although profit may still be possible with a shorter lease if a lot of work is required on the property that you are willing to undertake. Alternatively, you may decide not to extend the lease at all, as if your short-leasehold flat is high-value, that value may not even decline. As long as the lease is 20 years or more, you could live there and sell without losing money.

 

Are you stuck with a short-leasehold property? Contact Dream House Buyer today to sell your flat with a short lease to one of the UK's leading freeholders. 



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