The re-sale value of a leasehold property in Accrington is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension prior to buying. Ideally one should start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be finalised in advance of the eighty year cut off point. Leasehold Reform legislation entitles Accrington qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of 90 years. The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
Lender | Requirement |
---|---|
Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Bank of Scotland | Minimum 70 years from the date of the mortgage. |
Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
Halifax | Minimum 70 years from the date of the mortgage. |
Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Accrington,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Accrington valuers.
Dexter owned a 2 bedroom flat in Accrington on the market with a lease of just over sixty years unexpired. Dexter on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last month we were approach by Dr Alfie Turner , who acquired a garden apartment in Accrington in April 1999. The question was if we could estimate the price could be for a ninety year extension to my lease. Comparative premises in Accrington with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £55 collected per annum. The lease concluded in 2102. Having 78 years left we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including fees.
In 2010 we were contacted by Mrs O Brown who, having bought a garden apartment in Accrington in August 1996. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by an additional years. Similar properties in Accrington with 100 year plus lease were in the region of £191,000. The mid-range amount of ground rent was £65 collected per annum. The lease concluded on 21 April 2082. Considering the 58 years outstanding we approximated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 exclusive of legals.