The re-sale value of a leasehold property in Leven is impacted by how long the lease has left to run. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised in advance of the eighty year threshold. Leasehold Reform legislation enables Leven qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of 90 years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Leven with more than one hundred years remaining 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 home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Leven leasehold, as your property will be more valuable and marketable in terms 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.
Off the back of unsuccessful negotiations with the landlord of her basement flat in Leven, Natalie initiated the lease extension process just as the lease was nearing the crucial eighty-year mark. The transaction was concluded in September 2009. The freeholder’s charges were restricted to approximately 600 GBP.
In 2013 we were e-mailed by Dr K Reed who, having acquired a purpose-built flat in Leven in July 2012. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar premises in Leven with an extended lease were valued about £186,000. The mid-range ground rent payable was £65 collected per annum. The lease elapsed on 3 February 2084. Considering the 58 years unexpired we calculated the premium to the landlord to extend the lease to be within £24,700 and £28,600 exclusive of fees.
In 2013 we were contacted by Mrs Mollie Simon who, having acquired a basement apartment in Leven in June 1997. We are asked if we could approximate the price would be for a ninety year lease extension. Comparable premises in Leven with 100 year plus lease were in the region of £250,000. The average ground rent payable was £50 invoiced yearly. The lease termination date was in 2095. Taking into account 69 years left we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.