The market value of a leasehold property in Warrington is impacted by how long the lease has left to run. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be finalised in advance of the 80 year mark. Leasehold Reform legislation entitles Warrington 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 sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Retaining our service will provide you better control over the value of your Warrington leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
18 months ago Kian, started to get near to the eighty-year threshold with the lease on his ground floor apartment in Warrington. Having bought his flat two decades ago, the unexpired term was of no relevance. Thankfully, it dawned on him that he needed to take steps soon on a lease extension. Kian was able to extend his lease at the eleventh hour in September. Kian and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If the lease had gone below eighty years, the figure would have become more exhorbitant by a minimum £1,150.
Mr and Mrs. O Hernández completed a studio apartment in Warrington in April 1996. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical homes in Warrington with an extended lease were in the region of £264,000. The mid-range amount of ground rent was £60 collected yearly. The lease came to a finish on 2 January 2078. Considering the 53 years outstanding we estimated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 not including costs.
In 2012 we were phoned by Dr Aiden Bertrand who, having acquired a one bedroom flat in Warrington in May 2010. The dilemma was if we could estimate the premium could be to prolong the lease by a further 90 years. Identical properties in Warrington with 100 year plus lease were worth £225,400. The average amount of ground rent was £45 invoiced quarterly. The lease concluded in 2089. Given that there were 64 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 not including fees.