The re-sale value of a leasehold property in Arnold is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to start the lease extension process when the lease still has 82 years remaining so that formalities can be concluded ahead of the eighty year mark. Statute entitles Arnold qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Arnold with in excess of 100 years outstanding 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 home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
| 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. |
Lease extensions in Arnold can be a difficult process. We recommend you procure guidance from a conveyancing solicitor and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Arnold lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Last Autumn Caleb, came seriously close to the 80-year mark with the lease on his purpose- built flat in Arnold. In buying his property 18 years previously, the unexpired term was of no significance. As luck would have it, he noticed he needed to take action soon on a lease extension. Caleb arranged for a lease extension just under the wire in September. Caleb and the freeholder subsequently settled on sum of £6,000 . If he had missed the deadline, the figure would have become more exhorbitant by at least £850.
Last September we were called by Dr E Dupont , who moved into a basement apartment in Arnold in February 2004. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by ninety years. Comparative premises in Arnold with a long lease were worth £223,400. The mid-range amount of ground rent was £60 billed every twelve months. The lease terminated on 4 February 2084. Given that there were 59 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £27,600 and £31,800 not including legals.
In 2011 we were phoned by Dr James Gunderson who, having was assigned a lease of a recently refurbished flat in Arnold in November 2011. The question was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparative residencies in Arnold with an extended lease were valued around £205,000. The mid-range ground rent payable was £50 collected monthly. The lease ran out in 2104. Having 79 years remaining we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including expenses.