Clever British residents capitalizing on reduced property costs due to latest legislation
Sparky's Take: The Leasehold and Freehold Reform is on the horizon, and it looks like a game-changer for homebuyers, particularly those with leasehold agreements on their flats. Say goodbye to that landlord-like freeholder, as the new Act will make it cheaper and easier for you to either extend your lease or take the plunge and buy the freehold yourself.
In the meantime, some shrewd buyers are snagging properties with short leases, hoping that the renewal process post-Act will be a breeze. Yes, you read that right – they're buying flats with as little as eight years left on the lease! And guess what? They're getting a steal! A one-bedroom flat in upmarket Chelsea? For a measly £120,000? That's a fraction of the average sale price in the area!
But what, you ask, is the Leasehold Reform Bill all about? In a nutshell, it's gonna cut your costs and make lease extensions a walk in the park. It'll also increase the standard lease extension term to 990 years, give more leaseholders the right to manage their building, and banned new leasehold houses, amongst other things.
Now, you might be thinking, 'Short lease = risky investment.' Well, hold on tight! Once the new laws are in force, extending the lease will be a cinch. So, those buying a short lease home now are eyeing a cheap bargain, with hopes of extending it and turning a profit later on.
But, as with any investment, there's a bit of legwork involved. Extending a lease can take anywhere from three to 12 months, and it involves notifying the freeholder, hiring a specialist solicitor and surveyor, submitting an offer, negotiating the terms, paying deposits and extension costs, and more. However, the rewards could be substantial, with potential savings of up to 25% off the average home price if you've got 50 years or less on your lease!
So, are you ready to take the plunge and make your move on those short-lease properties? Remember, knowledge is power, and the Leasehold and Freehold Reform Act is here to empower you!
Need some expert advice on your mortgage journey? Well, fear not! London & Country (L&C) Mortgages, a partner of Metro, offers completely fee-free mortgage advice, with expert advisors available 7 days a week to guide you through the endless mortgage deals on offer. You can find out how much you could borrow online, without any unwanted fees! But remember, The FCA doesn't regulate most Buy to Let mortgages, so tread carefully if that's your investing strategy!
L&C Disclaimer: Mortgage service provided by London & Country Mortgages (L&C), which is authorized and regulated by the Financial Conduct Authority (registered number: 143002).
- For those considering investing in properties with short leases, it's essential to remember that extending the lease, though potentially rewarding, involves significant steps such as notifying the freeholder, hiring solicitors and surveyors, and negotiating terms, which can take anywhere from three to 12 months.
- In the dynamic world of business and finance, some astute buyers are capitalizing on the Leasehold Reform Act, purchasing flats with short leases at a discounted price, with plans to extend the lease and benefit from the expected rise in property value post-reform.
