The market value of a leasehold property in Elmswell depends on how long the lease has left to run. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be addressed prior to the eighty year threshold. Current legislation enables Elmswell qualifying lessees to an additional term of ninety years in addition to the existing term, at a peppercorn rent (zero ground rent). The reason 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 Elmswell with more than one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Elmswell,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Elmswell valuers.
Reuben owned a studio apartment in Elmswell being sold with a lease of a little over 72 years outstanding. Reuben informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Reuben to invoke his statutory right. Reuben obtained expert advice and was able to make a more informed decision and deal with the matter and sell the flat.
Last Winter we were called by Mr Luke Torres , who bought a garden flat in Elmswell in June 1995. The question was if we could approximate the premium would likely be to prolong the lease by 90 years. Identical flats in Elmswell with an extended lease were worth £250,400. The mid-range amount of ground rent was £65 collected quarterly. The lease terminated in 2090. Given that there were 64 years left we estimated the premium to the freeholder for the lease extension to be between £19,000 and £22,000 exclusive of expenses.
In 2011 we were called by Mr Evan Leroy who, having owned a basement flat in Elmswell in May 2010. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparative properties in Elmswell with 100 year plus lease were in the region of £189,000. The mid-range amount of ground rent was £55 billed quarterly. The lease terminated in 2079. Considering the 53 years left we calculated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 exclusive of fees.