What You Need to Know About Leasehold Properties Before You Sell
Do you own a leasehold property? Do you know how much time is left on your lease?
Understanding the remaining term on your lease is essential—especially if you’re planning to sell. At Alasdair Morrison, we regularly support clients across Newark and Southwell with leasehold sales, and a key issue we encounter is sellers being unaware of how lease terms can affect property value, marketability, and mortgage eligibility.
What Is Leasehold?
When purchasing a property, it’s crucial to understand the tenure—whether it’s freehold or leasehold.
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Freehold means you own both the property and the land it stands on.
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Leasehold means you own the property for a set number of years, but not the land it’s built on. The land remains under the ownership of the freeholder, often referred to as the landlord.
As defined by PropertyMark, leasehold tenure involves purchasing a lease from the freeholder, giving you the right to live in the property for a specific term—but not full ownership of the land.
How Long Is a Lease?
Some properties are granted long leases—typically up to 999 years—which provides long-term security. However, many properties were historically granted shorter leases, for example, 99 or 125 years. If your lease began several decades ago, it’s vital to check how many years remain.
So, what’s considered a “short lease”?
Why Lease Length Matters When Selling
According to Money Saving Expert, the cost of extending a lease increases significantly once the remaining term drops below 80 years. Here’s why this matters:
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Properties with under 80 years left can become difficult to mortgage.
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Buyers may offer less to cover the cost of a future lease extension.
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If a buyer requests you extend the lease before completion, the legal process can add weeks or even months to your timeline.
A lease with 90 years or more remaining is generally considered safe and shouldn’t raise issues during a sale. However, if you’re sitting between 80 and 90 years, it’s wise to speak to a professional about your options.
Can You Extend a Lease?
Yes—most leaseholders have a legal right to extend their lease, usually after owning the property for two years. However, the process can be complex and may involve negotiating with the freeholder and paying a premium. If you’re thinking of selling, it might be beneficial to start this process early, or at least understand what’s involved so you can plan accordingly.
Buying or Selling Leasehold in Newark or Southwell?
Leasehold ownership shouldn’t be a cause for concern—as long as you’re informed. The key is to understand your lease, know how many years are left, and be prepared for what buyers may ask during the selling process.
At Alasdair Morrison, our experienced property team in Newark and Southwell can guide you through every stage of buying or selling a leasehold home. Whether you need help checking your lease, arranging a lease extension, or preparing your property for sale, we’re here to help.
Contact us today for expert advice on selling your leasehold property or to request a free valuation.