The market value of a leasehold property in Limehouse is impacted by how many years the lease has remaining. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that formalities can be addressed well before the eighty year mark. Current legislation enables Limehouse qualifying lessees to an additional term of ninety years on top of the unexpired term, at a notional 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 conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Limehouse lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
After protracted negotiations with the freeholder of her one bedroom flat in Limehouse, Phoebe started the lease extension process as the eighty year deadline was swiftly nearing. The transaction was finalised in August 2010. The freeholder’s costs were negotiated to below 700 GBP.
Last Christmas we were contacted by Mr A Laurent , who owned a first floor flat in Limehouse in January 2004. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by ninety years. Similar homes in Limehouse with 100 year plus lease were in the region of £233,200. The mid-range amount of ground rent was £60 collected monthly. The lease end date was in 2086. Taking into account 61 years remaining we approximated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 plus fees.
An example of a Freehold Enfranchisement decision for a Limehouse property is 26 Rhondda Grove in June 2009. The net price payable by the leaseholders as determined by the Tribunal was £3,015.13. This comprised £11,300 premium for the reversion less £8,284.87 costs as ordered by the County Court.