Can I sell my flat on its current short lease?

by The Chartered Surveyor

Question

I want to sell my flat in Acton, but it has a short lease, with approximately 65 years left. I have looked into extending my lease, but I understand this can take months and I don’t want to wait that long before I put my flat on the market. Is it possible to sell my flat with its current short lease or would I be better off extending before selling?

Answer

Unfortunately the length of your lease is likely to make your property more difficult to sell. With leases below 70 years unexpired mortgageability can be an issue. There are a number of mortgage lenders who are willing to lend on a 65 year lease, but many wont, and this could cause financing difficulties for your buyer. Inevitably, this is going to have an impact on the sale price of your flat.

Furthermore, it is likely that the buyer will want to extend the lease. This means that he or she will have to finance not only the original purchase, but also the premium payable for extension. Coupled with financing issues, the buyer will also be faced with some uncertainty as to the costs involved, it often being difficult to estimate with any precision the premium that will be agreed and the professional fees that will be incurred in advance of the fact. These considerations will likely be enough to put off all but the most foolhardy of purchasers.

At 65 years unexpired, your lease is far from unsaleable. However, to the get the best price for your property, it needs to appeal to as wide a range of purchasers as possible. If you are able to extend your lease before putting your property in the market the flat will be a much more attractive proposition to your prospective buyer.