In England and Wales, leasehold ownership grants you rights to a property for a fixed term, but not the land it stands on. When a lease runs out the buildings on the land become the property of the freehold (land) owner. Most flats in England and Wales are leasehold.
A standard lease is usually 125 years long. Leasehold properties with a long lease are often only marginally cheaper to buy than freehold properties but as a lease gets shorter, the property reduces in value because of the cost to extend a lease.
When property is bought and sold, the agreement is transferred (NOT renewed) so the new owners are only buying the ownership of the buildings for whatever length of time is remaining on the lease.
Properties with less time can still be bought and sold, but most mortgage providers will only lend money against leasehold properties if the lease has more than 80 years left to run meaning they are typically bought by cash buyers.
Continue reading Extending a Lease on a Short Leasehold Property And Why You Should Act Sooner Than Later