The market value of a leasehold property in Carmel is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be addressed in advance of the eighty year threshold. Leasehold Reform legislation enables Carmel qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of ninety years. The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Carmel with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 conveyancers that we work with handle Carmel 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.
Off the back of unsuccessful discussions with the landlord of her ground floor flat in Carmel, Mollie initiated the lease extension process just as her lease was nearing the all-important eighty-year threshold. The legal work was concluded in June 2010. The freeholder’s costs were kept to an absolute minimum.
Last year we were called by Dr J Collins , who acquired a ground floor flat in Carmel in August 2003. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar premises in Carmel with a long lease were valued around £290,000. The mid-range ground rent payable was £45 billed annually. The lease termination date was on 10 January 2099. Having 73 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.
In 2011 we were e-mailed by Ms I Cox who, having acquired a one bedroom apartment in Carmel in May 1998. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative premises in Carmel with an extended lease were valued about £240,600. The average amount of ground rent was £60 billed monthly. The lease came to a finish on 12 March 2088. Given that there were 62 years remaining we calculated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 not including expenses.