The market value of a leasehold property in Lynton is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that all matters can be finalised ahead of the 80 year mark. Leasehold Reform legislation entitles Lynton qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Lynton 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.
Last Summer Lucas, came perilously close to the 80-year mark with the lease on his two bedroom flat in Lynton. In buying his home two decades ago, the unexpired term was of no bearing. Thankfully, he realised he needed to take steps soon on Extending the lease. Lucas was able to extend his lease at the eleventh hour last September. Lucas and the landlord subsequently agreed on a premium of £5,500 . If he had missed the deadline, the sum would have become more costly by a minimum £1,000.
Last year we were called by Ms Freya Rodríguez , who purchased a one bedroom apartment in Lynton in June 1995. We are asked if we could approximate the price would be for a ninety year extension to my lease. Comparable flats in Lynton with 100 year plus lease were worth £295,000. The average ground rent payable was £45 collected quarterly. The lease expiry date was in 2099. Taking into account 74 years left we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.
Mr E Edwards bought a one bedroom apartment in Lynton in April 2002. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparative premises in Lynton with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 billed per annum. The lease concluded in 2088. Considering the 63 years outstanding we estimated the premium to the landlord to extend the lease to be within £20,000 and £23,000 plus legals.