The market value of a leasehold property in Parkstone depends on how many years the lease has left to run. If it is close to or less than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised prior to the eighty year threshold. Statute entitles Parkstone qualifying lessees to obtain a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Parkstone with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Parkstone leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last Winter Stanley, came seriously near to the eighty-year threshold with the lease on his studio flat in Parkstone. In buying his home two decades ago, the length of the lease was of little importance. Thankfully, he recognised he would imminently be paying way over the odds for a lease extension. Stanley was able to extend his lease just under the wire last March. Stanley and the landlord in the end settled on the final figure of £6,000 . If the lease had gone below eighty years, the sum would have increased by at least £1,025.
Mr Kian Lefèvre acquired a studio apartment in Parkstone in August 2010. The dilemma was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Parkstone with a long lease were in the region of £166,400. The average amount of ground rent was £60 collected quarterly. The lease concluded on 27 April 2080. Given that there were 54 years outstanding we estimated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus professional charges.
Dr Erin Thomas moved into a studio flat in Parkstone in February 2006. The question was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparative properties in Parkstone with an extended lease were in the region of £227,800. The average ground rent payable was £45 billed quarterly. The lease concluded on 17 February 2091. Taking into account 65 years outstanding we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including legals.