The re-sale value of a leasehold property in Allenton is impacted by how many years the lease has left to run. If it is near to or less than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that formalities can be addressed prior to the eighty year threshold. Statute enables Allenton qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Allenton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
18 months ago Sam, started to get close to the eighty-year threshold with the lease on his garden apartment in Allenton. Having purchased his flat two decades ago, the unexpired term was of no bearing. Thankfully, he noticed he would soon be paying an inflated amount for a lease extension. Sam arranged for a lease extension just under the wire last August. Sam and the freeholder via the management company subsequently settled on a premium of £6,000 . If the lease had gone lower than eighty years, the price would have increased by a minimum £925.
Mr and Mrs. H Lefebvre completed a first floor flat in Allenton in August 2000. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Comparative flats in Allenton with 100 year plus lease were valued about £205,000. The average ground rent payable was £50 collected quarterly. The lease concluded in 2103. Given that there were 78 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £7,600 and £8,800 exclusive of expenses.
Ms Daisy Cox moved into a purpose-built apartment in Allenton in June 2005. We are asked if we could approximate the premium could be to extend the lease by 90 years. Identical properties in Allenton with an extended lease were valued about £267,600. The mid-range ground rent payable was £65 invoiced yearly. The lease lapsed in 2092. Having 67 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £14,300 and £16,400 plus professional charges.