The re-sale value of a leasehold property in Hurst Green depends on how long the lease has remaining. If it is near to or less than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that a lease extension can be finalised well before the eighty year threshold. Statute entitles Hurst Green qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 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 generally accepted that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Hurst Green leasehold, as your property will be more valuable and saleable 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.
Half a year ago Michael, came precariously near to the 80-year mark with the lease on his leasehold flat in Hurst Green. Having bought his flat two decades ago, the length of the lease was of minimal bearing. Luckily, it dawned on him that he would imminently be paying way over the odds for Extending the lease. Michael arranged for a lease extension at the eleventh hour last January. Michael and the landlord subsequently settled on the final figure of £5,500 . If he had missed the deadline, the figure would have become more exhorbitant by at least £1,100.
Mr Matthew Anderson was assigned a lease of a purpose-built apartment in Hurst Green in July 2002. The question was if we could approximate the premium would be to extend the lease by 90 years. Comparative flats in Hurst Green with a long lease were valued about £216,000. The mid-range amount of ground rent was £60 collected annually. The lease terminated in 2084. Having 58 years left we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of legals.
Ms Rebecca Alexander moved into a newly refurbished flat in Hurst Green in March 2001. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Comparable properties in Hurst Green with 100 year plus lease were worth £205,000. The average ground rent payable was £50 collected monthly. The lease terminated in 2104. Taking into account 78 years left we estimated the compensation to the landlord to extend the lease to be within £7,600 and £8,800 not including legals.