The re-sale value of a leasehold property in Farnborough depends on how many years the lease has left to run. If it is close to or fewer than 80 years you should expect problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to start the lease extension process when the lease still has 82 years unexpired so that all matters can be addressed ahead of the eighty year mark. Leasehold Reform legislation entitles Farnborough qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a peppercorn rent (zero ground rent). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancing solicitors that we work with procure Farnborough 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 conveyancer we work with provide it.
During the course of the last few months Daniel, started to get close to the eighty-year mark with the lease on his one bedroom flat in Farnborough. Having bought his home 18 years ago, the length of the lease was of no relevance. Luckily, he recognised he would soon be paying an inflated amount for Extending the lease. Daniel extended the lease just ahead of time last July. Daniel and the landlord subsequently settled on a premium of £5,500 . If the lease had gone lower than 80 years, the premium would have escalated by a minimum £1,100.
Mr Seth Howard purchased a purpose-built flat in Farnborough in August 1997. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical properties in Farnborough with 100 year plus lease were valued about £181,600. The average amount of ground rent was £55 billed annually. The lease ran out in 2078. Having 52 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 not including professional charges.
In 2012 we were called by Ms M Adams who, having moved into a one bedroom apartment in Farnborough in January 2002. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Comparative flats in Farnborough with an extended lease were valued around £290,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease elapsed on 14 February 2098. Given that there were 72 years outstanding we approximated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 plus fees.