Selling a leasehold property is actually pretty similar to selling a freehold place, as long as you have a long lease.
If the lease length is getting near to 80 years, you'll ideally want to extend it before selling, as that could affect your home's value.
You’ll also need to supply a leasehold information pack for your buyer, which goes into all the details around the service charges, ground rent and the management company for the property.
What is a leasehold home?
If you own a leasehold home, you’re actually leasing the home from the freeholder for a period of time.
Flats are almost always leasehold, but houses can be too.
If you own the freehold, you own the bricks and mortar and the parcel of land it sits on too.
Is it harder to sell a leasehold property?
There tends to be more moving parts in a leasehold sale than a freehold one, making problems and delays more likely.
But thorough preparation and having a reputable estate agent and solicitor on side will help make the process as smooth as possible.
What’s the process for selling a leasehold property?
1. Get your property valued
First things first, find out how much your home could sell for.
At My Home you can get an instant online estimate of what your home is worth
Over on our house prices page, you can see what other homes in your area have sold for by town, road name or postcode
Then invite three local estate agents round for a valuation
Nothing beats having an estate agent come to value your property.
A local agent will take in any home renovations you've done and give you a price based on all of your home's unique features and general condition.
2. Check the length of your lease
It’s really important to know the length of your lease before you start marketing your home. That’s because it could affect the value and saleability of your place.
You can find out the length of your lease in the paperwork you were given when you bought your home.
It’s also worth checking the small print for any other nuggets that could impact your sale.
As a general rule of thumb, the longer the lease, the better. They can be up to a whopping 999 years.
A short lease, considered to be around 80 years or less, could hit the value of your home.
It could also make it harder to sell as mortgage lenders are typically wary of short leases.
What happens if you have a short lease?
The good news is that there are options available if you have a short lease.
a: Extend the lease
If you’ve owned your leasehold property for at least two years, you have the right to a lease extension.
But if this statutory route doesn’t suit (maybe you’ve owned your place for less than two years), you can still approach the freeholder informally and ask to extend your lease.
The cost of extending depends on a variety of factors, including the existing lease length and how much your place is worth.
Make sure you get advice from your solicitor before making any decisions.
And keep an eye out for the government’s plans to make it easier and cheaper for leaseholders to extend their leases.
b. Buy the freehold
You could consider buying the freehold of your place, again either formally or informally.
You could, if eligible, team up with other leaseholders in your block of flats to buy the freehold. This is often known as collective enfranchisement.
Or, if your circumstances allow it, you may be able to snap up the freehold outright.
Again, the cost depends on many factors.
With pros and cons to weigh up, and various legal steps and rules to consider, it’s vital to get advice from your solicitor first.
It’s also worth monitoring the government’s proposals to allow more leaseholders to buy the freehold of their building.
3. What documents do you need to sell a leasehold property?
When selling a leasehold property, you’ll need a copy of your lease. This is essentially the contract between you and the freeholder.
It lays out, among other things, your rights and responsibilities as a leaseholder.
You’ll also need to fill out a Leasehold Information Pack, otherwise known as a Leasehold Management Pack or TA7 form.
This basically includes all of the information about the lease. It’s often filled in by your solicitor or conveyancer and outlines things like:
any plans for major works
the building’s insurance policy details
details on any management company that has been formed by the tenants to manage the lease/freehold
any asbestos surveys carried out
any external wall fire reviews
Any serious buyer will need to see the leasehold information before committing to an offer, so it’s worth having it ready up front.
As with any property sale, there’s a lot of paperwork to dig out but your solicitor will be able to guide you through it all.
With Shared Ownership and Help to Buy properties, there are extra steps involved in the selling process.
You’ll need to get your home valued by an independent RICS surveyor when you decide to sell it and with Shared Ownership specifically, your housing association will usually try to find a buyer for you.
4. Hire the right estate agent and solicitor
Get the right crew onboard to help you sell your place.
Hire a good local estate agent and solicitor or conveyancer who have experience of - or even better, specialise in - selling leasehold properties.
They’ll be well-placed to iron out any issues that might come up with your lease.
5. Prepare your place for sale
From fixing cracked tiles, to giving the walls a lick of paint, spruce up your place for sale.
And if your pad is part of a block of flats, do what you can to perk up the communal areas too.
The stairs, corridors, garden... they are all likely to leave a lasting impression on buyers.
5. Market your home
Your estate agent will do the heavy lifting here. They’ll market your home, arrange viewings and liaise with potential buyers - in the same way they would with a freehold property.
6. Accept an offer
Once you accept an offer, your solicitor or conveyancer will get cracking on drafting a contract and overseeing other legal aspects of the deal.
There is typically more legwork involved with the sale of a leasehold property than a freehold one.
Your buyer will want to scrutinise the terms of your lease, for example. And they will no doubt be eagle-eyed in any dealings with the freeholder or the firm that manages the freehold.
7. Finalise the sale and hand over the keys
Once everything is finalised, you will exchange contracts with the buyer, making your deal legally binding.
Your buyer would lose a substantial amount of money if they were to pull out after this stage.
Around two-to-three weeks later, the final stage in the selling process happens: completion. That's when the lease officially changes hands.