Extending Your Lease When Youre Selling a Flat

If you are selling a leasehold flat, the length of your lease can significantly affect the sale price, buyer interest and mortgage availability.

Understanding your lease extension options early can help avoid delays and protect the value of your property.

Why lease length matters 

As a flat lease shortens, it can become harder for buyers to obtain mortgage finance. This can reduce the pool of potential buyers and lead to pressured price negotiations.

Once a lease drops below 80 years remaining, buyers very often require a lease extension to proceed with a purchase.  With leases between 90 and 80 years remaining, future expense of extending the lease will be a consideration for the buyer, often resulting in  negotiation of the sale price, or an insistence that the lease be extended before or at the time of the sale. 

If you are looking to sell your flat and have a short lease, you have a number of options in how you proceed: 

Option 1: Extend the lease before marketing

Completing a lease extension before marketing the flat can make the property more attractive to buyers and simplify the conveyancing process.

However, this option requires time and upfront costs.

Option 2: Extend the lease alongside the sale

In some cases, particularly with informal lease extensions, it may be possible to coordinate completion of the lease extension with the sale of the flat.

This approach depends heavily on landlord cooperation and careful coordination between all parties involved; our lease extension specialists form part of our residential property team, so we can help you with the lease extension and conveyancing seamlessly.   

Option 3: Start a statutory lease extension and assign it to the buyer

A key advantage of the statutory lease extension process is that the benefit of the claim can be assigned to a buyer on completion.

This allows the buyer to take over your existing statutory claim and complete the lease extension after purchase without having to wait before starting their own claim.  

Assigning the benefit of a statutory claim is less common now the two-year ownership requirement to make a statutory claim has been removed, and the buyer can make their own claim once they are the registered owner of the flat, but it can be advantageous where your lease term is due to fall under the 80 years remaining point, as serving a statutory claim before that point can fix the date for calculating the premium; under the current law the price payable increases significantly once a lease term drops below 80 years remaining. 

Option 4: Selling without extending the lease

It is possible to sell a flat without extending the lease, but this result in a reduced sale price, and may limit you to sales to cash buyers.

Choosing the right lease extension strategy

The best approach depends on factors such as the remaining lease length, proximity to the 80-year threshold, sale timing and market conditions.

Early specialist advice can help sellers choose the most effective strategy and avoid last-minute pressures and complications.