The market value of a leasehold property in Ladywell is impacted by how many years the lease has remaining. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years to run so that all matters can be addressed ahead of the 80 year mark. Leasehold Reform legislation enables Ladywell qualifying lessees to an additional term of ninety years over and above the existing term, at a peppercorn rent (zero ground rent). 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.
It is generally accepted that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you enhanced control over the value of your Ladywell 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.
Toby owned a studio flat in Ladywell being marketed with a lease of a little over sixty years left. Toby on an informal basis spoke with his freeholder a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. No ground rent would be payable on a lease extension were Toby to invoke his statutory right. Toby procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
In 2009 we were called by Ms A Morgan who, having acquired a recently refurbished flat in Ladywell in August 1999. The dilemma was if we could approximate the price would be to prolong the lease by ninety years. Comparable flats in Ladywell with an extended lease were in the region of £242,600. The average amount of ground rent was £45 collected yearly. The lease ended on 23 November 2092. Considering the 67 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Ladywell property is 44 Elmer Road in January 2013. The Tribunal dacied that amount to be paid by the Leaseholders for the Landlords freehold reversion was £12,951 as at the valuation date (20" September 2012).This matter was referred back to the Bromley County Court to deal with costs, fees and any other outstanding matters. This case was in relation to 2 flats. The remaining number of years on the lease was 74.25 years.