What Does Lease Property Mean? Friday Q&A Video #7 :1 House Buy Fast

Hello, my name is Jonathan Rolande, and I’m
here today on behalf of House Buy Fast to answer some questions for you here today.
So, thank you very much for sending those in. Getting straight on with it. The first
one and this is from HayB2010. Hello, what does lease property mean? If I
lease a property, how come the property is stated at £49,950? That’s an interesting question. Basically,
what you are doing with buying a lease, which I guess is probably a flat, is actually paying
£49,950 to have normally a 99 or a 125 year lease. Which means that the £49,950 isn’t for the
land, it’s actually for the building that you’re leasing for that period of time. So, you’re quite right that your answer is
paying that sum of money for a lease, but the fact that it is so long means that you
or any relatives or subsequent buyers of the flat can continue to live there probably for
the next 70, 80, 90 years. Just on that point, it is important to check
the length of the lease. If it gets anywhere near about 70 years or
less, it will be very difficult for either you or any subsequent buyers when you come
to solve that to actually raise a mortgage against it. So, most properties now are running a little
bit lower if they are built in the 1960s or 70s, and the cost of renewing a lease even
in a flat of 49,950 could be anything say 5 or £10,000. So, you need to know that the
lease is a good length, 75, 80 years plus. If it isn’t, then do double check that the
owner will be paying for the lease renewal, not yourself or in some way build that into
the negotiations when you start. So, I hope that answers the question. Any other queries,
let me know.

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