The market value of a leasehold property in Clun depends on how many years the lease has left to run. If it is close to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to start the lease extension process when the lease still has 82 years remaining so that a lease extension can be addressed prior to the 80 year threshold. Leasehold Reform legislation enables Clun qualifying lessees to an additional term of 90 years over and above the existing term, at a peppercorn rent (zero ground rent). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Clun with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with handle Clun 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 lawyer we work with provide it.
Riley was the the leasehold owner of a high value apartment in Clun being sold with a lease of just over 59 years left. Riley on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Riley to exercise his statutory right. Riley obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. Y Gunderson bought a garden apartment in Clun in September 1997. The dilemma was if we could approximate the price would be to extend the lease by 90 years. Comparable residencies in Clun with an extended lease were in the region of £265,000. The average ground rent payable was £55 invoiced monthly. The lease elapsed on 15 August 2100. Having 74 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.
In 2010 we were contacted by Mr and Mrs. V Roberts who, having purchased a one bedroom flat in Clun in October 1999. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar flats in Clun with a long lease were worth £166,400. The mid-range ground rent payable was £60 invoiced monthly. The lease lapsed on 11 September 2080. Having 54 years left we approximated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 exclusive of fees.