The market value of a leasehold property in Cheddar is impacted by how long the lease has left to run. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years to run so that all matters can be concluded well before the eighty year mark. Current legislation entitles Cheddar qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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. |
| 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. |
Retaining our service gives you increased control over the value of your Cheddar leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of unsuccessful correspondence with the freeholder of her ground floor flat in Cheddar, Caitlin commenced the lease extension process as the eighty year mark was rapidly nearing. The transaction completed in September 2015. The freeholder’s charges were kept to an absolute minimum.
Last Spring we were called by Mr and Mrs. I Lefebvre , who owned a basement apartment in Cheddar in October 2001. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Cheddar with a long lease were worth £264,000. The average ground rent payable was £60 invoiced monthly. The lease finished on 15 July 2079. Considering the 53 years left we calculated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 plus fees.
Last year we were e-mailed by Mrs Naomi Bernard , who moved into a one bedroom flat in Cheddar in August 1996. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparative residencies in Cheddar with 100 year plus lease were worth £225,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease expired in 2090. Considering the 64 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 not including costs.