The market value of a leasehold property in Todmorden is impacted by how long the lease has remaining. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that all matters can be addressed in advance of the eighty year threshold. Leasehold Reform legislation entitles Todmorden qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Todmorden with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers that we work with undertake Todmorden 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 lawyer we work with provide it.
In recent months Luca, started to get near to the 80-year threshold with the lease on his studio apartment in Todmorden. Having purchased his home two decades ago, the length of the lease was of little importance. Thankfully, he noticed he needed to take steps soon on a lease extension. Luca extended the lease just under the wire in April. Luca and the freeholder eventually agreed on sum of £5,500 . If he had missed the deadline, the premium would have become more costly by a minimum £1,150.
Mr W Mercier owned a one bedroom flat in Todmorden in March 2007. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Identical homes in Todmorden with an extended lease were valued about £210,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease terminated on 19 June 2106. Given that there were 80 years remaining we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus fees.
Last Spring we were called by Mrs Alicia Díaz , who purchased a one bedroom apartment in Todmorden in July 2005. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Comparable properties in Todmorden with an extended lease were worth £275,000. The mid-range ground rent payable was £45 invoiced per annum. The lease ran out in 2095. Considering the 69 years unexpired we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.