There is a growing number of properties being built and sold on a leasehold basis, both in relation to houses and apartments. Purchasing a leasehold property means you are buying the rights to live in that particular property for a specific amount of time. Modern flat leases in London typically tend to last between 99 and 125 years, whereas leasehold houses may have terms of up to 999 years.
At the outset of the lease term, little concern is raised about a lease with 125 years left to run. During this time several owners will live in that property. However, as the years pass, the length of time left to occupy diminishes. This then can create issues. Who would want to buy a property at a premium with a guaranteed right to occupy for a small amount of years? In addition, banks will not assist purchasers of leasehold properties unless the terms of years left on the lease exceeds a minimum, in some cases the minimum number of years being at least 70. Some leasehold properties, if their leases diminish without action, render the properties incapable of being sold or mortgaged. In these cases the value is reduced, and their potential purchasers are limited to cash purchasers looking for a bargain.