The Lease Hold Trap.

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The Lease Hold Trap.

 You can buy a lease hold property with 1 to 999 years on the lease. Once it passes 100 years mortgage lenders see the property in much the same way as Freehold.

So a 99 year lease to borrow against as security is as good as freehold.But here is the catch. If you have say a 150 year lease on your home many buyers will be put off. Which by definition reduces the value.

Furthermore there are investors who specialise in buy the freehold of these types of lease holds.

A growing number of people are finding themselves caught in these strange “reduced equity properties”. To then buy the free hold the investors wont sell or will only sell at exorbitant prices.

If you are buying a property. Make sure it is free hold or a 999 year lease. Other wise get as much advice as you can on what you are getting yourselves into.

 

 

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