JUMPING OVER HURDLES AND ACHIEVING SALES!
Competition in the flat market is fierce and there’s no shortage of enthusiastic buyers out there! Good quality flats in highly desirable locations are continuing to attract full asking price offers within days of going on the market. So why doesn’t the property always sell?
The reason can be a short lease. Potential buyers are in good supply and highly motivated but a short lease can put them off because it de-values the property.
For example
If we take a flat with a lease of 60 years, this could effect the current market price by around 85%. Which means that if the flat is worth £200,000 at current market value (with a long lease) it would only be worth £170,000 with a lease of 60 years!
Add to this the fact that getting a mortgage becomes increasingly difficult, with most high street lenders unwilling to lend under 70 years, and your sale (and commission) has gone out the window!
Even if the property market cools off over the next few months, and prices go down, a flat with a longer lease would continue to be a more attractive purchase for any buyer.
The Answer – Lease Extension
For the majority of flat owners a lease extension is a statutory right and is calculated on a statutory basis.
What Estate Agents Can Do:
Find out from your vendor how many years remain on the lease and make sure they understand the drawbacks of a short lease before the property goes on the market. This should ensure a swift and hassle free sale.
Help is at hand from RDN Chartered Surveyors We have been operating for over 10 years as the experts for lease renewals in the Surrey, Sussex and Greater London areas. We are able to value the premium required to extend a lease or to collectively buy the freehold. If we cannot agree we can go to Tribunal.
