The market value of a leasehold property in Matlock depends on how long the lease has left to run. If it is close 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 ahead of purchasing. It is ideal to start the lease extension process when a lease still has 82 years remaining so that a lease extension can be addressed prior to the 80 year cut off point. Statute enables Matlock qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). 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 residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| The Mortgage Works | Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed: Second hand property: - If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years - if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported - For equity share applications - advise us if the actual lease term is different than reported on the offer New build property: - If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house) - For equity share applications - always advise us if the actual lease term is different than reported on the offer Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below. SECOND HAND PROPERTIES Unacceptable - advise Issuing Office (Will be declined): - Unexpired lease term less than 70 years - Less than 30 years remaining at the end of the mortgage term - Ground Rent greater than 0.5% of the property value - Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more - Ground Rent is compounded RPI - Ground Rent review period less than or equal to 5 years Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Unexpired lease term is 70 to 85 years - Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value - Ground Rent escalation is linked to any indices greater than RPI - Ground Rent escalation is linked to the value of the building* - Ground Rent review period is greater than 5 and less than 10 years - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc - Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover) - Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover) - Anything that appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term greater than 85 years - Ground Rent less than or equal to 0.1% of the property value - Ground Rent review period greater than or equal to 10 years - Ground Rent escalation less than or equal to RPI NEW BUILD PROPERTIES (includes office conversions) Unacceptable - advise Issuing Office (will be declined): - Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house - Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis - Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability): - Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc - Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover) - Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover) - Anything else appears onerous, unusual or out of the ordinary Acceptable (no requirement to advise Issuing Office): - Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house - A lease subject to a peppercorn ground rent (annual rent) charges For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance * Where the Ground Rent escalation is linked to the value of the building, please provide the following: - How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property? - The current valuation and Ground Rent for each unit - What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned? - What is the right of appeal? And is this a documented process within the lease? - Who bears the cost of the valuation (and appeal) process? - Confirmation the review period is not less than twenty years LEASE EXTENSIONS We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Matlock can be a difficult process. We recommend you get professional help from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Matlock lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Muhammad was the the leasehold owner of a 2 bedroom apartment in Matlock on the market with a lease of fraction over sixty years left. Muhammad on an informal basis approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. No ground rent would be payable on a lease extension were Muhammad to exercise his statutory right. Muhammad procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2012 we were approached by Mr and Mrs. K Vincent who, having bought a one bedroom apartment in Matlock in July 2002. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable properties in Matlock with 100 year plus lease were valued around £181,600. The mid-range ground rent payable was £55 collected yearly. The lease ended in 2078. Taking into account 52 years unexpired we approximated the premium to the landlord to extend the lease to be between £30,400 and £35,200 not including expenses.
Ms Rachael Howard moved into a garden flat in Matlock in July 1999. The question was if we could estimate the premium would be to extend the lease by ninety years. Similar homes in Matlock with 100 year plus lease were valued about £290,000. The average ground rent payable was £45 invoiced per annum. The lease elapsed on 4 March 2098. Considering the 72 years remaining we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus costs.