The market value of a leasehold property in Beckermet depends on how many years the lease has left to run. If it is close to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years to run so that formalities can be addressed in advance of the eighty year threshold. Statute entitles Beckermet qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Beckermet with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Using our service gives you enhanced control over the value of your Beckermet leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Teddy owned a 2 bedroom flat in Beckermet on the market with a lease of just over fifty eight years outstanding. Teddy on an informal basis contacted his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Teddy to exercise his statutory right. Teddy procured expert advice and secured satisfactory deal without going to tribunal and readily saleable.
Last Autumn we were e-mailed by Ms Mia Khan , who completed a recently refurbished flat in Beckermet in January 1996. The question was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative flats in Beckermet with 100 year plus lease were in the region of £233,200. The average amount of ground rent was £60 billed every twelve months. The lease ran out in 2086. Having 61 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 exclusive of costs.
Last Autumn we were called by Mr H Khan , who was assigned a lease of a recently refurbished flat in Beckermet in July 2001. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Similar flats in Beckermet with 100 year plus lease were in the region of £174,200. The mid-range ground rent payable was £55 invoiced every twelve months. The lease lapsed in 2076. Having 51 years unexpired we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of legals.