If you’re looking at a house move in, Balham, Tooting or Wandsworth one thing you need to consider is whether you’re selling a leasehold property. A huge proportion of London homes are leasehold – most are flats but not always – so chances are yours might be too. Selling a leasehold property doesn’t have to be difficult but there are a few things to bear in mind. From picking the right solicitor to extending your lease if you need to, we look at what’s involved in selling a leasehold property in the UK.
What is a leasehold property?
A leasehold property is one where the buyer owns the property – but not own the land it is built on. The land is owned by a freeholder (also called the landlord) who grants the homeowner a ‘lease’ to occupy the property for a specified period. Lease lengths can be very long – more than 900 years in some cases – but many are around 100 years.
The lease document sets out the terms and conditions under which the property can be occupied. These include any service charges and ground rent as well as prohibitions – such as on having pets, subletting or carrying out certain renovations.
Can you sell a leasehold property?
Yes, you certainly can sell a leasehold property and doing so isn’t significantly more complex than selling a freehold home. As we’ve said, most London flats are leasehold – if the process wasn’t relatively straightforward, no London flat owners would move at all! However, there are some things to bear in mind – the length of your lease being a key one.
Is it hard to sell a leasehold property?
As long as you have enough time left on your lease, finding a buyer for a leasehold property shouldn’t be more difficult than if your property is freehold. If your home is a flat, most buyers will expect it to be leasehold. The conveyancing process can be more complicated than when selling a freehold property. This is because your solicitor will need to do more work around checking the details of the lease and the service charges and ground rent. If your property has a short lease (less than 80 years), it will be more difficult to sell as potential buyers may be put off by the cost of extending the lease – see below.
Things to consider when selling a leasehold property
Before putting your leasehold property on the market, there are several things you should consider.
1. Do you need to extend the lease?
If your lease has less than 80 years remaining, you should look at extending it before selling the property. If you don’t, you may find it difficult to attract buyers and need to accept a lower offer than you would otherwise. Anyone can approach their freeholder to ask to extend the lease. But as long as you’ve lived in the property for at least two years, you have a statutory right to a lease extension. How much you pay will depend on factors such as the length of the lease and what the home is worth. Buying the leasehold can be a tricky business, so it is advisable to appoint a solicitor with experience in this area.
2. Could you buy the freehold?
Freehold properties are often more attractive to potential buyers. Owning freehold removes the need to pay ground rent or extend the lease and it offers more control over service charges – so this might be something for you to consider before selling a leasehold property. You may be able to buy the freehold outright or in partnership with other residents – known as collective enfranchisement. Again, you’ll need proper legal advice from someone experienced in this area.
3. What documents do you need when selling a leasehold property?
When selling a leasehold property, you will need to gather certain documents together for your buyer’s solicitor. These include:
– The lease
– Details of the management company
– Service charge and ground rent information
– Buildings insurance information
– Details of any alterations made to the property
– Energy Performance Certificate (EPC).
4. How should you prepare your leasehold home for sale?
As with any property sale, you’ll need to spruce up the home so it is looking its best, tackling any outstanding DIY jobs, refreshing the paintwork and giving it a good declutter. Remember that first impressions really do count, so communal areas, such as hallways, stairs and gardens, are worth tackling too – cleaning them may not technically be your job, but attending to them could help you clinch that sale.
5. Choose the right team
As leasehold properties can come with issues, it’s particularly crucial to have the right team in place. When choosing your estate agent and conveyancer, look for people with experience of selling a leasehold property and a good track record in this area.
6. Keep an eye on the media
The current government has talked a lot about reforming the leasehold system so keep an eye on any developments that could have an impact on your sale.
If you have a leasehold property to sell in Wandsworth, Tooting or Balham we’d love to help. We’re a south west London estate agent with plenty of experience of marketing leasehold homes in the local area – and we would be delighted to offer your home a no-obligation market appraisal.