The re-sale value of a leasehold property in Emersons Green depends on how many years the lease has remaining. If it is near to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be addressed well before the 80 year cut off point. Leasehold Reform legislation entitles Emersons Green qualifying lessees to a 90 year extension added to their remaining 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 sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Emersons Green with over one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Halifax | Minimum 70 years from the date 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. |
| 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 |
Retaining our service will provide you increased control over the value of your Emersons Green leasehold, as your property will be more valuable and saleable in terms of lease length should you want 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.
Dylan owned a 2 bedroom flat in Emersons Green being sold with a lease of a little over sixty years outstanding. Dylan on an informal basis approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Dylan to invoke his statutory right. Dylan procured expert legal guidance and secured an acceptable deal without going to tribunal and sell the flat.
Last August we were approach by Ms U Adams , who was assigned a lease of a studio flat in Emersons Green in February 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical premises in Emersons Green with 100 year plus lease were worth £216,000. The average ground rent payable was £60 invoiced every twelve months. The lease came to a finish on 16 April 2084. Considering the 58 years left we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including legals.
Mr and Mrs. W Vincent acquired a ground floor flat in Emersons Green in October 2000. We are asked if we could estimate the price would be for a ninety year extension to my lease. Similar properties in Emersons Green with a long lease were in the region of £205,000. The average ground rent payable was £50 collected annually. The lease finished in 2104. Having 78 years remaining we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus costs.