The re-sale value of a leasehold property in Preston Park is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that all matters can be concluded prior to the 80 year cut off point. Statute entitles Preston Park qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Preston Park 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.
Trailing lengthy negotiations with the freeholder of her two bedroom flat in Preston Park, Erin commenced the lease extension process just as the lease was coming close to the crucial 80-year threshold. The legal work was finalised in October 2015. The landlord’s charges were negotiated to about five hundred GBP.
Last year we were e-mailed by Mr and Mrs. H Young , who took over the lease of a ground floor apartment in Preston Park in November 1995. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year lease extension. Comparable flats in Preston Park with a long lease were worth £176,200. The average ground rent payable was £65 collected per annum. The lease expired in 2081. Taking into account 56 years remaining we approximated the premium to the freeholder to extend the lease to be within £29,500 and £34,000 plus costs.
In 2009 we were approached by Mr and Mrs. C Wilson who, having completed a one bedroom flat in Preston Park in June 2011. The dilemma was if we could approximate the premium would likely be to extend the lease by an additional years. Comparable flats in Preston Park with an extended lease were worth £242,600. The mid-range amount of ground rent was £45 invoiced monthly. The lease expired in 2092. Having 67 years outstanding we approximated the compensation to the landlord for the lease extension to be within £11,400 and £13,200 not including costs.