A new trend is emerging with investors buying properties that have 80 years or less left on the lease. Large savings of up to 20% have been reported, as short-term lease properties are harder to sell to the general public, due to the known problems and cost of extending a lease.

According to a recent report the average number of years remaining on a lease throughout the UK is just over 43 years. Regional variations shown in the report states that this drops to 25 years across the North West of England. The price difference of a lease with a relatively short lease has shown properties selling for £40,000 less than the one next door which has a typical 90+ year lease.

Should a lease be allowed to completely expire, the ownership of that property would go back to the freeholder. Obtaining mortgages on properties with short leases can be problematical or impossible, as some lenders will not even consider it or include a premium for covering it. The cost of extending a lease is shown to be between £5,000 and £40,000 dependant on various factors including the length of extension required. Valuation costs and legal fees, including those paid by the  freeholder has shown that costs can escalate up to £100,000 per dwelling.