The market value of a leasehold property in Catton 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 advisable to arrange for a lease extension ahead of purchasing. It is preferable to start the lease extension process when a lease still has 82 years to run so that formalities can be addressed prior to the 80 year threshold. Statute entitles Catton qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Catton with in excess of one hundred years remaining 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 freehold unless savings on ground rent and estate 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Catton,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 Catton valuers.
Seth owned a 2 bedroom flat in Catton being marketed with a lease of just over sixty years remaining. Seth informally contacted his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Seth to invoke his statutory right. Seth procured expert legal guidance and was able to make an informed judgement and deal with the matter and sell the flat.
Last March we were called by Mr and Mrs. S Bernard , who completed a newly refurbished apartment in Catton in April 2010. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by ninety years. Comparative flats in Catton with an extended lease were in the region of £171,800. The average ground rent payable was £55 billed every twelve months. The lease finished on 4 January 2076. Having 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 not including costs.
In 2013 we were phoned by Mr J Baker who, having bought a one bedroom flat in Catton in March 2002. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical flats in Catton with an extended lease were valued about £280,000. The mid-range amount of ground rent was £45 collected per annum. The lease lapsed in 2096. Considering the 70 years left we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of expenses.