Clowne residential property held on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
It is generally accepted that a property with more than 100 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 premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | |
| Bank of Scotland | |
| Barclays plc | |
| Birmingham Midshires | |
| Yorkshire Building Society |
Engaging our service gives you increased control over the value of your Clowne leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Ethan, started to get close to the eighty-year mark with the lease on his studio flat in Clowne. In buying his flat 18 years previously, the unexpired term was of minimal concern. As luck would have it, he became aware that he would imminently be paying an escalated premium for Extending the lease. Ethan was able to extend his lease just under the wire last September. Ethan and the freeholder via the managing agents subsequently settled on the final figure of £5,500 . If the lease had slid below eighty years, the premium would have escalated by a minimum £1,125.
In 2010 we were approached by Mr Jonathan Hall who, having purchased a purpose-built flat in Clowne in July 2004. We are asked if we could approximate the price could be for a ninety year lease extension. Identical properties in Clowne with 100 year plus lease were valued about £243,000. The average ground rent payable was £65 billed every twelve months. The lease elapsed in 2089. Given that there were 63 years outstanding we estimated the premium to the landlord to extend the lease to be between £20,000 and £23,000 not including expenses.
Last year we were approach by Ms Georgina Bell , who acquired a recently refurbished flat in Clowne in January 2003. The question was if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical residencies in Clowne with an extended lease were in the region of £181,600. The average amount of ground rent was £55 invoiced per annum. The lease concluded on 16 October 2078. Given that there were 52 years outstanding we estimated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 not including fees.