The market value of a leasehold property in Berrylands is impacted by how long the lease has left to run. If it is near to or less than eighty years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that all matters can be addressed ahead of the 80 year threshold. Leasehold Reform legislation enables Berrylands qualifying lessees to obtain a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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; |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The lawyers that we work with procure Berrylands 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.
Following protracted correspondence with the freeholder of her studio apartment in Berrylands, Catherine commenced the lease extension process as the eighty year deadline was rapidly approaching. The legal work completed in January 2014. The freeholder’s fees were kept to an absolute minimum.
Mr and Mrs. Y Campbell moved into a garden apartment in Berrylands in March 2010. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Comparable properties in Berrylands with an extended lease were worth £186,000. The average ground rent payable was £65 collected annually. The lease ran out on 12 January 2083. Having 58 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £24,700 and £28,600 exclusive of expenses.
An example of a Lease Extension matter before the tribunal for a Berrylands premises is Flat D 15 Claremont Gardens in September 2013. TheTribunal determined in accordance with section48 and Schedule13 of the Leasehold Reform,Housing and Urban Development Act 1993 that the premium for the extended lease should be fourteen thousand one hundred and eighty seven pounds (£14,187.00) This case related to 1 flat.