The market value of a leasehold property in Prestwich depends on how many years the lease has remaining. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that formalities can be concluded in advance of the 80 year cut off point. Leasehold Reform legislation entitles Prestwich qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). 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 considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Yorkshire 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. |
Using our service gives you enhanced control over the value of your Prestwich leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Adam was the the leasehold proprietor of a high value apartment in Prestwich on the market with a lease of just over 59 years left. Adam on an informal basis spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Adam to invoke his statutory right. Adam procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mr and Mrs. W Peterson was assigned a lease of a newly refurbished apartment in Prestwich in September 2012. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Similar residencies in Prestwich with an extended lease were valued around £171,800. The mid-range ground rent payable was £55 collected every twelve months. The lease expired on 6 June 2076. Considering the 50 years left we calculated the premium to the freeholder to extend the lease to be between £33,300 and £38,400 plus expenses.
Dr Harvey André was assigned a lease of a recently refurbished flat in Prestwich in November 1995. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Identical premises in Prestwich with 100 year plus lease were valued about £280,000. The average amount of ground rent was £45 collected per annum. The lease finished in 2097. Taking into account 71 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus costs.