The re-sale value of a leasehold property in Princes Risborough depends on how long the lease has left to run. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is preferable to commence the lease extension process when a lease still has 82 years unexpired so that all matters can be addressed ahead of the 80 year mark. Leasehold Reform legislation enables Princes Risborough qualifying lessees to obtain a lease extension of 90 years on top of the remaining length of the lease 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.
Leasehold properties in Princes Risborough with more than one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The lawyers that we work with procure Princes Risborough 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.
Jacob was the the leasehold proprietor of a conversion flat in Princes Risborough on the market with a lease of a little over sixty years left. Jacob on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jacob to exercise his statutory right. Jacob procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Mr U Baker took over the lease of a one bedroom flat in Princes Risborough in March 2008. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by an additional years. Comparable residencies in Princes Risborough with an extended lease were worth £250,000. The mid-range ground rent payable was £50 collected every twelve months. The lease lapsed in 2095. Considering the 69 years left we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Last Autumn we were phoned by Mrs Amber Gray , who acquired a recently refurbished apartment in Princes Risborough in August 2006. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Comparative residencies in Princes Risborough with a long lease were worth £285,000. The average ground rent payable was £55 collected monthly. The lease came to a finish in 2106. Taking into account 80 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.