Law firm Bolt Burdon Kemp surveyed leaseholders and found that 36% did not know the length of their lease and 55% had no knowledge of the 80-year rule.
The 80-year rule means that a lease with less than 80 years left steadily becomes less valuable, leaving the property owner with a diminishing asset that they may be unable to sell or mortgage.
Bolt Burdon Kemp puts this lack of knowledge down to poor advice from conveyancing solicitors. Its survey found that many respondents were not given basic information about the importance of lease length and renewing the lease in plenty of time.
Almost all flats and apartments are leasehold property but buying a leasehold can be fraught with issues and, as Bolt Burdon Kemp’s survey demonstrates, the lack of knowledge can create an avoidable and very expensive problem for homeowners further down the line.
Bolt Burdon Kemp’s professional negligence team surveyed 2,000 property owners in England and Wales for their views on the process of buying a leasehold property, their knowledge of the importance of a lease’s length and the quality and extent of professional advice these property buyers are getting when purchasing a leasehold property.
Partner at Bolt Burdon Kemp, Stephen Hill, said: “It is clear from these results that leaseholders are simply not being given enough information by their professional advisors before buying flats and apartments.
“This is creating a ticking time bomb for many leaseholders. Not knowing the length of your lease or the impact if it falls below 80 years is very serious – it could mean you struggle to sell the property or renew your mortgage.
“Solicitors and conveyancers advising leaseholders must do more to ensure property owners are fully aware of what they are getting themselves into when they buy a lease.”