The market value of a leasehold property in Castle Eden depends on how many years the lease has remaining. If it is near to or fewer than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be addressed well before the 80 year mark. Current legislation enables Castle Eden qualifying lessees to an additional term of 90 years on top of the unexpired term, at a peppercorn rent (no ground rent). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Castle Eden with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Halifax | |
| Leeds Building Society | |
| Skipton Building Society | |
| Yorkshire Building Society |
The conveyancing solicitors that we work with undertake Castle Eden 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 conveyancing solicitor we work with provide it.
Oliver owned a high value flat in Castle Eden being marketed with a lease of just over 61 years left. Oliver on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. No ground rent would be due on a lease extension were Oliver to exercise his statutory right. Oliver obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Mrs V Bernard owned a purpose-built flat in Castle Eden in August 1995. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Castle Eden with a long lease were worth £255,000. The average ground rent payable was £50 collected per annum. The lease came to a finish in 2096. Given that there were 70 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.
In 2010 we were phoned by Mr Theo Hernández who, having moved into a purpose-built flat in Castle Eden in June 1998. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Identical premises in Castle Eden with a long lease were in the region of £246,800. The mid-range amount of ground rent was £60 collected quarterly. The lease expiry date was on 27 October 2076. Given that there were 50 years unexpired we estimated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 not including fees.