The market value of a leasehold property in Fawley is impacted by how long the lease has remaining. If it is close to or fewer than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when a lease still has 82 years unexpired so that formalities can be addressed ahead of the eighty year threshold. Current legislation entitles Fawley qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Fawley with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
Lease extensions in Fawley can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Fawley lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Rory owned a studio flat in Fawley being sold with a lease of a little over 61 years unexpired. Rory on an informal basis spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Rory to invoke his statutory right. Rory obtained expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Last Autumn we were e-mailed by Dr Oliver Kelly , who acquired a ground floor flat in Fawley in November 2005. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Comparative flats in Fawley with 100 year plus lease were worth £218,400. The average ground rent payable was £60 billed monthly. The lease ran out on 8 June 2085. Given that there were 59 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £27,600 and £31,800 not including fees.
In 2012 we were called by Mr and Mrs. I Davies who, having bought a one bedroom flat in Fawley in September 2011. The question was if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Comparable flats in Fawley with a long lease were worth £205,000. The mid-range amount of ground rent was £50 billed quarterly. The lease termination date was in 2105. Considering the 79 years left we approximated the compensation to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of legals.