We’ve seen this query lighting up the Landlord UK Facebook group: “A flat with an 87-year lease. Is it worth buying? How easy is it to extend leases? It’s a 2-bed maisonette. Can you get BTL mortgages on it at 87 years or will I be limited?” If you’re a North East landlord eyeing properties in Sunderland or Durham (where BTL yields average 7-10% but short leases can slash resale value), this is crucial. With the Leasehold and Freehold Reform Act 2024 now in effect (as of 2025), extensions are easier and cheaper, but 87 years is a sweet spot—above the 80-year “trap” but close enough to warrant action. Let’s break it down engagingly, like a strategy session, with pros/cons, extension steps, mortgage insights, and North East tips to help you decide if it’s a buy or bye.
The Issue Unpacked: 87-Year Leases in 2025 An 87-year lease is solid—above the 80-year threshold where extension costs spike due to “marriage value” (50% premium share to freeholder, now reformed under LFRA 2024 to make extensions cheaper overall). It’s worth buying if priced right (5-10% discount for lease length), as you can extend to boost value (£10k-£20k uplift for a £150k flat per Savills). Pros: Cheaper extensions now (avg £5k for £200k flat, down from £10k pre-reform), easier process (no 2-year ownership rule for new buyers under LFRA). Cons: Mortgages limited (lenders want 85+ years remaining), resale trickier without extension. For BTL, it’s doable but with fewer lenders and higher rates (4.5-6% vs. 4%). North East note: Lower prices (£100k-£150k avg maisonettes) mean extensions cost £3k-£6k, but grants like ECO4 (£1k-£5k) can offset if energy upgrades included.
Is It Worth Buying? Quick Pros/Cons
- Yes, if: You plan to extend soon (add 90 years at nil rent, boosting yield 1-2%). At 87 years, it’s not “dangerous” (under 80), so mortgageable, and reforms make future sales easier. For BTL, 8-10% yields possible post-extension.
- No, if: You hate admin (extensions take 3-12 months), or need quick resale—under 85 years limits buyers. Group consensus: Buy if discounted 5-10%, extend immediately.
Step-by-Step: How Easy Is Lease Extension in 2025? Under LFRA 2024, it’s easier/cheaper (no marriage value for leases over 150 years post-extension, but 87-year still benefits from reforms). Two routes: Formal (statutory, protected) or informal (negotiate with freeholder). Process: 3-12 months, avg cost £5k (solicitor £1k-£2k, valuer £500-£1k, premium £3k for £200k flat at 87 years).
- Qualify and Prep (Week 1-2) Own for 2 years (waived for new buyers under LFRA for some cases—check GOV.UK). Get valuation (£500-£1k, e.g., Lease Extension Valuation tool or local surveyor like North East Leasehold). Premium based on ground rent, lease length, property value—use online calculators (HOA or Osbornes). North East: Cheaper surveyors (£400 avg).
- Choose Route: Formal vs. Informal (Week 3)
- Formal (Recommended): Serve Section 42 notice (solicitor £800-£1,500). Freeholder has 2 months to respond; add 90 years, nil rent. If dispute, tribunal (fees £500-£1k). Easy: Protected rights, but 6-12 months if contested.
- Informal: Negotiate directly—faster (3-6 months), but freeholder sets terms (e.g., higher premium). Risks: No fallback if talks fail. Tip: Use Leasehold Advisory Service (free) for guidance.
- Complete and Register (Months 3-6) Agree terms, pay premium. Solicitor handles deed (£200-£500). Register with Land Registry (£20-£140). North East: Faster tribunals (3-6 months vs. London 9+).
- Costs and Timeline Summary Total: £3k-£8k (premium £2k-£5k for £150k flat at 87 years, pros £1k-£3k). Timeline: 3-12 months. Easy? Yes, with pros—group users say solicitors like Leasehold Solutions (£1k fixed) streamline.
BTL Mortgages on 87-Year Leases: Limited but Doable Yes, possible—lenders prefer 85+ years remaining (or 30-50 years post-mortgage term). At 87 years, options: 60-70% LTV, higher rates (4.5-6% vs. 4%). Lenders like Paragon or Kensington accept 70-85 years; mainstream (Nationwide) want 85+. Limited: Fewer choices, stricter stress tests (rental cover 125-145%). Extend lease first for better terms (95% LTV possible post-extension). North East: Specialist brokers like Coreco offer short-lease BTL (fees £500-£1k). For maisonettes: Similar rules, but ground rent/service charges scrutinized.
Real Win: A Sunderland landlord bought an 85-year lease flat for BTL—extended for £4k, got 75% LTV mortgage at 4.8%, yields up to 9%.
This keeps your investments sharp—87 years is buyable, but extend ASAP for max value.
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