Rob delves into the intricacies of leaseholds in this episode, focusing specifically on the importance of lease length when considering purchasing a leasehold property. Rob highlights the potential challenges that arise when a lease falls below 80 years, making it difficult to secure a mortgage and significantly increasing the cost of extending the lease. Listeners are advised to consult with a specialist solicitor and factor in the premium for extending the lease when evaluating the value of a property.
KEY TAKEAWAYS
BEST MOMENTS
"There comes a point where if the length of the lease gets to a certain time frame, then it could become much more challenging to get a mortgage on that property."
"The cost, though, of increasing the length of lease significantly increases when the lease falls below 80 years. This normally means that lenders won't lend on it."
"Surprise, surprise, the government have proposed reforms to make it cheaper to extend short leases. But as with anything and everything that's been going on through the halls of Westminster, you probably won't be surprised to hear that that's going to take a while for that to go through."
"If, for example, a flat's worth £500,000, and it's got 81 years left on the lease, then the premium on extending that lease would be around about 11,000 pounds."
"General rule of thumb is that when a leasehold or when a lease is 80 years or less, then it becomes significantly more challenging to get any form of lending on it."
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