Would you consider buying a flat with a short lease?

[Earlybird]

What's the shortest lease you would consider when looking to purchase a flat? What happens when the lease runs out? What are the best case/worst case scenarios?

Are all houses freehold? Sorry if that's a silly question......

You can have problems getting amortgage on a short lease property. Although it shouldn't be a problem to extend the lease now.

How many years does the lease have left?

Presumably you must pay to extend the lease? Can the freeholder refuse to negotiate, or offer an extension for a ludicrous price? What if you can't agree? Do you lose the flat, and all/any equity?

Chandra - I don't have a flat in mind atm, but wonder if I should bother viewing/considering those with a short lease.....

Depends where the property is? In central London you would probably accept a shorter lease, but as a standard i would say anything under 100 years is a no go. When you come to sell the property you want a substantial period of years left on the lease.

When the lease expires you have a right to buy a new lease. But this is going to be at market value, though take proper legal advice, as you may have a right to a discount.

Very short leases are really like renting a property at a set value.

Yes, most houses are freehold, though again in parts of London the big estates like Grosvenor Estate own the freehold and the houses are leasehold

Earlybird, I would say don't look at short term leases if you are looking for an investment.

When I bought my flat it had 69 years left on a 99 year lease. I had to shorten the term of my mortgage from 25 years as the company required a certain amount left to run at the end. when I sold it, I extended it to either a new 99 year lease or 150 - I can't remember! - and it cost me about £3-£4K IIRC. This was S London about 8 years ago.

Not all houses are freehold (we once looked at a mews new build which was leasehold ) but the vast majority would be. Also you may find that a freehold is co-owned by one or more of the flat owners or that you may have an option to buy it which would eliminate the risk. Think is it normally unadvisable to buy less with than 60 years left.