The market value of a leasehold property in Canford Heath depends on how long the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is ideal to start the lease extension process when a lease still has 82 years remaining so that formalities can be finalised ahead of the eighty year cut off point. Statute entitles Canford Heath qualifying lessees to obtain a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Canford Heath with more than one hundred years outstanding on the lease are often referred to as ‘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 reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage 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. |
The conveyancers that we work with procure Canford Heath 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.
In recent months Felix, started to get close to the 80-year threshold with the lease on his studio apartment in Canford Heath. In buying his property two decades ago, the unexpired term was of little bearing. Thankfully, he recognised he would imminently be paying an escalated premium for Extending the lease. Felix arranged for a lease extension at the eleventh hour in March. Felix and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If he failed to meet the deadline, the price would have become more exhorbitant by a minimum £1,000.
In 2010 we were e-mailed by Ms S Davies who, having was assigned a lease of a newly refurbished apartment in Canford Heath in April 2003. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative flats in Canford Heath with 100 year plus lease were worth £218,000. The average amount of ground rent was £45 collected annually. The lease concluded on 28 August 2089. Considering the 63 years remaining we approximated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 not including fees.
In 2013 we were e-mailed by Mr Finley Cooper who, having was assigned a lease of a purpose-built flat in Canford Heath in July 1995. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar flats in Canford Heath with a long lease were valued around £265,000. The mid-range amount of ground rent was £50 billed per annum. The lease terminated on 15 January 2100. Considering the 74 years left we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.