The re-sale value of a leasehold property in Boscastle depends on how long the lease has left to run. If it is close to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the lease extension process when the lease still has 82 years to run so that formalities can be addressed in advance of the eighty year threshold. Leasehold Reform legislation enables Boscastle qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The purpose of the valuation is to determine 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 unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire Building Society | 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. |
Retaining our service will provide you increased control over the value of your Boscastle leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Lewis, came very near to the 80-year mark with the lease on his purpose- built apartment in Boscastle. In buying his flat 18 years ago, the unexpired term was of little importance. As luck would have it, he noticed he needed to take steps soon on a lease extension. Lewis extended the lease just in the nick of time in August. Lewis and the landlord ultimately agreed on a premium of £5,000 . If he failed to meet the deadline, the price would have escalated by a minimum £900.
Last month we were phoned by Mr and Mrs. T Flores , who took over the lease of a first floor flat in Boscastle in July 2005. The dilemma was if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Comparative residencies in Boscastle with an extended lease were valued about £205,000. The mid-range ground rent payable was £50 collected quarterly. The lease expiry date was on 18 April 2102. Given that there were 78 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
Last Winter we were called by Mr Y Green , who moved into a one bedroom apartment in Boscastle in August 2009. The question was if we could approximate the premium would be for a ninety year lease extension. Similar premises in Boscastle with 100 year plus lease were worth £267,600. The mid-range amount of ground rent was £65 collected yearly. The lease concluded in 2091. Taking into account 67 years as a residual term we estimated the premium to the landlord for the lease extension to be within £14,300 and £16,400 plus professional charges.