The re-sale value of a leasehold property in Carisbrooke depends on how long the lease has left to run. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when a lease still has 82 years remaining so that formalities can be addressed in advance of the eighty year threshold. Current legislation entitles Carisbrooke qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 30 years plus the term of the mortgage at the outset of the mortgage. |
Retaining our service will provide you increased control over the value of your Carisbrooke leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Elijah was the the leasehold proprietor of a conversion flat in Carisbrooke being sold with a lease of fraction over sixty years remaining. Elijah informally approached his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Elijah to invoke his statutory right. Elijah obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Spring we were phoned by Mr and Mrs. T Simon , who completed a ground floor apartment in Carisbrooke in August 2003. The question was if we could approximate the premium would likely be for a 90 year lease extension. Identical premises in Carisbrooke with 100 year plus lease were in the region of £210,000. The average ground rent payable was £50 collected yearly. The lease ended in 2106. Given that there were 80 years left we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including fees.
In 2011 we were e-mailed by Mr A Parker who, having was assigned a lease of a one bedroom apartment in Carisbrooke in November 2012. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Similar flats in Carisbrooke with 100 year plus lease were valued about £275,000. The average amount of ground rent was £45 collected monthly. The lease ended on 13 April 2095. Taking into account 69 years unexpired we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 plus expenses.