Thousands of People Stuck With Short Leases
A report from the Home Owners Alliance suggests that around 400,000 homeowners in the United Kingdom are living in a property with a short lease. So short that they may be unable to sell their property if they decide to leave. They may not even have enough cash to extend their leases either. It is believed that it would cost over £5 billion to renew all of these leases.
The problem is that many homeowners are falling into a trap. They can’t afford to extend their lease, and if they could sell their property, they would be taking a massive loss on it. This is why
companies like ours have been so beneficial to people in recent years. We can cover the costs of extending a lease, while also offering a guaranteed purchase price on the sale of a property. This helps to prevent families from suffering from financial ruin.
The Problem will only get worse
The problem is that this is an issue which is only going to get worse as time goes on. New developers are starting to sell their properties with leases. This is, in part, down to recent government funding which has allowed young people easier access to the housing ladder. Developers are trapping young people, and pensioners, into leases. In twenty to thirty years, we will likely see massive issues when it comes to leases on properties. While it may be 400,000 households living with a short-term lease right now, in a couple of decades, the figure could easily be double, if not triple, that.
Buyers can’t afford to renew their leases
The shorter a lease gets, the more expensive it will be to renew the lease. As a result, many people are allowing their leases to drop below the 80-year mark. This can add a considerable sum of cash onto renewal. In fact, it will add an amount that is nigh on unaffordable for anybody.
When it comes to selling a property with a short lease, the problems get even worse. Mortgage companies will rarely lend cash for properties with under 70-years remaining on their lease. Most leaseholders will need to wait for cash buyers instead. This can cause even more issues for the seller. At this point, it becomes a ‘buyer’s market’, and people are more likely to sell their property on for a loss. For example; a property with an 80-year lease will get pretty much close to market value. A property with a 30-year lease attached may be worth about 45% of market value at the maximum.
There are options for those with short term leases
Thankfully, there are options available for those with short term leases. Companies like Sell Your House Quickly Southend will be able to pay the costs of extending your lease. We will then be able to help sell your home for a guaranteed price. While it may not sell for as much as if you extended the lease on your own, it would sell for a whole lot more than if you failed to extend the lease at all. We do not lowball here. We want to ensure that you can sell your home for the best possible price and, perhaps more importantly, as quickly as possible.
Please get in touch with us today if you are one of the 400,000 families who feels they are stuck with a short- term lease and no viable route out.