The market value of a leasehold property in Berkeley is impacted by how long the lease has remaining. If it is near to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years remaining so that formalities can be addressed in advance of the eighty year cut off point. Current legislation enables Berkeley 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 purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Berkeley with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Berkeley,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Berkeley valuers.
Half a year ago Kian, came very near to the 80-year mark with the lease on his ground floor apartment in Berkeley. In buying his home two decades ago, the length of the lease was of little relevance. Luckily, he noticed he would imminently be paying way over the odds for a lease extension. Kian was able to extend his lease at the eleventh hour in March. Kian and the freeholder via the managing agents subsequently settled on sum of £5,500 . If the lease had descended below 80 years, the sum would have increased by a minimum £950.
Last Spring we were phoned by Mr and Mrs. B Dupont , who bought a ground floor apartment in Berkeley in May 2001. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in Berkeley with a long lease were worth £173,800. The mid-range amount of ground rent was £65 billed monthly. The lease lapsed on 14 June 2080. Given that there were 55 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.
In 2013 we were e-mailed by Mr and Mrs. T Peterson who, having bought a one bedroom flat in Berkeley in June 1996. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical residencies in Berkeley with an extended lease were worth £235,200. The mid-range amount of ground rent was £45 invoiced per annum. The lease ended on 11 June 2091. Considering the 66 years remaining we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of professional charges.