The market value of a leasehold property in Aughton 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 ahead of purchasing. 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 ahead of the eighty year threshold. Statute enables Aughton 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 reason of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold 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 worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 handle Aughton 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.
George owned a 2 bedroom flat in Aughton being sold with a lease of a little over 61 years outstanding. George on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were George to invoke his statutory right. George obtained expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Mrs L Anderson purchased a one bedroom apartment in Aughton in January 2002. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Comparative properties in Aughton with 100 year plus lease were valued around £280,000. The average amount of ground rent was £55 invoiced yearly. The lease expired in 2104. Taking into account 78 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of costs.
In 2009 we were e-mailed by Mr and Mrs. O Bell who, having moved into a newly refurbished flat in Aughton in September 2003. The dilemma was if we could approximate the price would be to prolong the lease by ninety years. Similar residencies in Aughton with a long lease were in the region of £191,000. The average amount of ground rent was £65 collected yearly. The lease expired on 6 November 2084. Having 58 years outstanding we approximated the premium to the landlord to extend the lease to be within £23,800 and £27,400 not including professional charges.