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The short answer is no…
As long as your leasehold property is priced correctly and ‘ticks the right boxes’, it will usually sell without any hitches.
Most flats and maisonettes in the UK are owned on a leasehold basis and many exchange hands every day. Estate agents and conveyancers are well-accustomed to dealing with these types of property.
However, much will depend on:
To go through each of these potential problems individually…
If your lease length is under 80 years, you’ll probably find it a struggle to sell.
Although you may be able to find a willing cash only buyer, as the majority will wish to use a mortgage, lenders are more likely to be reluctant to grant finance.
Check out out our post on selling a property with a short lease for some detailed guidance.
In short, if you’re looking for the full market value for your property (and can afford the cost), we would suggest extending the lease length to a minimum of 95 years.
You may be able to negotiate with the freeholder to extend the lease during the sales process. However, it often makes better sense to undergo this process before putting your property up for sale.
Preparation is key.
Alongside the standard Law Society forms sent with the seller’s pack, there will be extra leasehold property documentation to complete and further requests to be made to the freeholder.
As long as you have key documents at hand and a direct line of communication with the freeholder, there shouldn’t be any problems.
See our post on selling your leasehold property for more tips.
Before putting your flat up for sale, it’s worth dropping the freeholder a line to advise of your plans.
You may want to ask who will be the main port of call. Perhaps also request an alternative contact should he/she be away. You can then help chase things if the conveyancer is struggling.
Alternatively, you may wish to ask your conveyancer exactly what they will need so you can collate the relevant paperwork yourself.
Indeed, it’s crucial that you instruct a good legal representative to conduct the conveyancing and that your estate agents are proactive.
Regardless of whether it’s a freehold or a leasehold, expecting the full market value for a property that’s in average or below average condition is unrealistic.
Badly maintained grounds and issues external parts of the building(s) will also have a negative effect on the property’s valuation.
We would encourage to examine how much your house is worth using a range of free online tools out there and deduct the realistic costs to refurbish the property.
A decent, honest estate agency with a good track record of selling a range of different properties will be able to advise you on the best course of action.
The buyer’s conveyancer will go through the lease with a fine-tooth comb.
They will want to know the details of:
Any onerous conditions will get flagged up. This could include the use of communal areas, rights of way and rules regarding work on the property.
Sometimes, for instance, service charges can seem high for potential buyers.
This becomes a potential bone of contention if works need to be done across the grounds of the building or, worse, there’s evidence of collective finances being squandered.
Since the 2000s, many new build houses were sold as leasehold properties when in all reality, they should have been freehold properties.
In an unfortunate turn of events, many of these property owners have been hit by the ground rent scandal.
Facing extortionate increases in annual ground rents, these properties have turned into a noose around people’s necks.
If you’re facing this situation, please check out our post on this subject.