The market value of a leasehold property in Chapel En Le Frith is impacted by how many years the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that a lease extension can be addressed well before the 80 year mark. Leasehold Reform legislation enables Chapel En Le Frith qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Chapel En Le Frith leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing protracted correspondence with the freeholder of her purpose-built flat in Chapel En Le Frith, Ella started the lease extension process as the eighty year mark was quickly approaching. The transaction was finalised in November 2007. The freeholder’s charges were kept to an absolute minimum.
In 2014 we were called by Mrs Louise Ward who, having purchased a newly refurbished flat in Chapel En Le Frith in February 1996. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by a further 90 years. Identical properties in Chapel En Le Frith with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 billed monthly. The lease ended on 11 February 2095. Taking into account 70 years unexpired we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.
In 2010 we were approached by Mr and Mrs. V Bonnet who, having owned a purpose-built apartment in Chapel En Le Frith in January 1995. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparable flats in Chapel En Le Frith with a long lease were valued about £246,800. The average amount of ground rent was £60 billed every twelve months. The lease expired in 2075. Having 50 years remaining we calculated the premium to the landlord for the lease extension to be between £44,700 and £51,600 not including fees.