Properties with a lease ending within 80 years can be secured at a discount of £36,000, 12% less than the surrounding properties, analysis by Open Property Group has revealed.
Price reduction differs regionally, climbing to £52,000 in the South East, £46,000 in the East of England (£41,830) and £44,000 across the West Midlands.
It’s thought that the process of extending a lease can cost between £5,000 to £38,000 depending on a number of factors, including the time left on the original lease and the ground rent owed on the property.
Then there’s also lease extension valuation costs to consider, legal fees and you have to pay Section 60 costs for the freeholder too. You may even have to pay stamp duty if the extension cost climbs to more than £125,000.
Jason Harris-Cohen, chief executive of Open Property Group, said: “A short lease can be the stuff of nightmares for leasehold homeowners and allowing your lease to slip below a certain threshold can effectively render your property impossible to sell.
“At best, a short lease is going to require you to cut your asking price expectations in order to secure a buyer due to the additional costs incurred with the process of extending it.
“Short lease homes are a current occurrence amongst those looking to sell their home quickly with Open Property Group, as the quick sale route allows them a fuss free move, a far quicker timeline in doing so and the ability to progress their onward purchase with minimal disruption.”
The South East currently ranks as the nation’s short lease hotspot when it comes to current for sale stock, accounting for 30% of the national total, followed by London (19%) and the East of England (16%).
Labour has committed to improving the leasehold sector by making it easier to extend them.
