Lease life health check for apartment owners
Thu 03 Nov 2022
Richard Cleaver, Head of Residential, Shouler & Son, signals the importance of a healthy lease life length for apartment owners looking to sell.
References to ‘leasehold’ or ‘freehold’ sale are more commonly played out in the regular work of our commercial property agency colleagues at Shoulers and their clients.
And in residential estate agency, it’s colleagues in our professional lettings service for whom discussion of leases is the bread and butter of their daily practice in securing tenants for landlord clients.
That being said, talk of lease life does figure for our residential sales agency when we are instructed in the sale of an apartment.
It is rare for an apartment to come to market for freehold sale. Apartments are sold leasehold and it is the remaining length of the lease that helps guide the market value of the apartment property.
Apartments whose lease life of, most commonly, 99 years is maturing towards middle age could present a sticking point on sale – or even for consideration for re-mortgaging - because mortgage lenders like to look to the long term when it comes to lending on property assets.
The lenders’ view is always the security of the loan. There is a comfort for them in their loan investment - in the form of a mortgage on a property - being looked after for a long time and holding its value within the agreed timescale of their investment.
Apartment owners do retain rights to extend their lease in negotiation with the freeholder of the property for an agreed premium.
It is a very niche area of property law and apartment owners are best to seek legal and valuation advice from qualified and accredited professionals specialising in the subject.
Owners of apartments - whether a primary or secondary residence, or an investment property - should always be mindful of where there property is in the lifecycle of its lease.
Knowing the life left in the lease will leave apartment owners in an informed position when it comes to selling and moving on.
To find out more about Shouler & Son’s residential valuation services, see