The market value of a leasehold property in Sipson depends on how long the lease has left to run. If it is close to or fewer than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that formalities can be concluded well before the eighty year threshold. Current legislation entitles Sipson qualifying lessees to an additional term of ninety years on top of the remaining term, at a peppercorn rent (zero ground rent). The reason of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Sipson,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Sipson valuers.
In 2014 Hunter, came very close to the 80-year threshold with the lease on his first floor flat in Sipson. In buying his property two decades ago, the unexpired term was of little interest. As luck would have it, it dawned on him that he would soon be paying an inflated amount for Extending the lease. Hunter extended the lease at the eleventh hour last March. Hunter and the freeholder via the management company in the end settled on sum of £5,000 . If the lease had slipped below 80 years, the premium would have become more costly by a minimum £1,000.
Last Christmas we were approach by Dr E Baker , who owned a first floor apartment in Sipson in August 2012. The question was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative residencies in Sipson with an extended lease were valued around £290,000. The mid-range ground rent payable was £60 invoiced every twelve months. The lease lapsed on 5 March 2105. Given that there were 80 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.
An example of a Freehold Enfranchisement decision for a Sipson property is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The unexpired term as at the valuation date was 69 years.