The re-sale value of a leasehold property in Greenfield is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that all matters can be concluded prior to the 80 year cut off point. Leasehold Reform legislation enables Greenfield qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose 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.
Leasehold premises in Greenfield with in excess of 100 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 circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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 enhanced control over the value of your Greenfield leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Oliver was the the leasehold owner of a conversion flat in Greenfield being sold with a lease of a few days over fifty eight years unexpired. Oliver on an informal basis approached his landlord being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be due on a lease extension were Oliver to invoke his statutory right. Oliver procured expert advice and was able to make a more informed judgement and deal with the matter and sell the flat.
In 2010 we were contacted by Mr and Mrs. J Patel who, having took over the lease of a newly refurbished apartment in Greenfield in April 2001. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Comparable homes in Greenfield with 100 year plus lease were valued around £210,600. The average ground rent payable was £45 billed yearly. The lease termination date was on 28 April 2088. Given that there were 62 years remaining we calculated the premium to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of professional charges.
Last Autumn we were e-mailed by Ms D Morgan , who moved into a purpose-built apartment in Greenfield in March 2005. The dilemma was if we could estimate the premium would be to prolong the lease by 90 years. Identical residencies in Greenfield with a long lease were worth £265,000. The mid-range amount of ground rent was £50 invoiced annually. The lease came to a finish in 2099. Given that there were 73 years remaining we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including costs.