BTL flat has 83yrs. left on lease: good investment?

[Asy Tang]

I am thinking of getting a flat for investment(BTL) but the flat only have about 83 years lease remain. Would the value of the property be devalue alot in about 10 or 20 years time and would it be costly to extend the lease? I would be grateful if someone to give me a reply on the above questions. Many thanks.

[Poppy]

A lease which has an unexpired term of 83 years is loads. How old are you?

You have to say to yourself: how long do I intend to keep the property?

Under the 1993 Leasehold Reform Act leaseholders have the right to extend the term of their lease by 90 years.

[Asy Tang]

Thanks Poppy

If I get the flat I would keep it for about 10 years, by then the lease years remaining will be only 73 left. If I do extend the lease that would mean I have to pay for it from any profit I made. Would this still make business sense, and at the moment I have no ideas how much would it cost for extending the lease. Hope you can understand my point.

I do see a lot of people buying leasehold flat for buy-to-let investment, don't know if they feel the same as I do. How about you? Do you see any problem with selling the flat with only 60 to 70 lease, or the cost of topping the lease up?

I am 37 by the way, and thanks one again for your replied. Hope to hear from you again. Many thanks

[Poppy]

Be logical. Think to yourself, how many people own leasehold properties in England and Wales?

If you're still worried don't buy leasehold properties, buy freeholds instead.

[Uncle Fester]

The ‘Freeholder’ can hold you to Ransom, and charge you anything for the extension!

Also, stay clear of ex-local authority properties, due to the government’s ‘Decent Homes Standard’ legislation, it could cost you a lot of money in repairs & improvements!

[tenant29]

I am thinking of getting a flat for investment(BTL) but the flat only have about 83 years lease remain. Would the value of the property be devalue alot in about 10 or 20 years time and would it be costly to extend the lease? I would be grateful if someone to give me a reply on the above questions. Many thanks.

Extending the lease should be done before the lease term falls below 80years as the extra cost of paying half the marriage value will arise.

What is the market value of your target flat and what annual ground rent is payable ?