A three-bedroom home in one of the most expensive parts of London has been put on the market for just £575,000.
But the “unmodernised” maisonette in Knightsbridge comes with a catch – it only has THREE YEARS left on the lease.
In what is an incredibly rare occurrence, the owner of the property has let the lease run down and the longer a lease is left, the higher a premium the freeholder can demand.
So they have now put the property, in exclusive Egerton Place, on the market with Russell Simpson for £575,000.
With three years left on the lease, it works out at £191,000 per year, or 15,000 per month – which is around the going rate for renting a three-bedroom flat in the area.
But if any buyer decides to extend the lease, the property could be worth upwards of £6 million.
The “bright and well proportioned” property has 1,990 sq/ft of space and boasts three bedrooms, two bathrooms, a reception room and utility room along with a lift, parking and a communal garden.
It is one of two maisonettes being sold by Russell Simpson with three years left on the lease.
Both homes will need to be modernised , with the second, larger property – also on Egerton Place – on the market for £595,000.
The next cheapest three-bedroom property in Knightsbridge costs #1.5 million, and this flat is only offered with a 28-year lease.
Jake Russell, from Russell Simpson, said: “Properties like this come up once in a blue moon and I think it is an outstanding opportunity.
“To get properties like this in Egerton Place is very exciting and the phone hasn’t stopped ringing, which is quite unusual considering the time of the year with the election around the corner.
“We have had interest from locals, developers and end users. In modernised condition, we would estimate they would sell for between £2,750 and £3,000 per sq/ft.”
This gives the smaller property a #6 million prices tag, while the larger maisonette with 2,500 sq/ft of space could be worth £7.5 million.
Any buyer would have to negotiate a lease extension with the freeholder and, for a 90-year lease, it is likely to cost between £3.35 and £4.5 million.
One property consultant said it was very rare for a pair of properties to come onto the market with such short leases.
Alex Newall, from Hanover Private Office, said: “It looks cheap, but there will be a massive premium to pay to extend the lease.
“A developer will probably buy it or someone might use it as a rental for three years and then give it back to the freeholder.
“It is a very quirky situation. Properties do come up with very short leases like this every so often but it is very rare for somewhere like Knightsbridge.
“I know someone who let their lease run down to eight years and they thought ‘right, I need to extend it’, but by then it was too late and the extension was too much.
“Let it be a warning to check your lease.”