The market value of a leasehold property in Fetcham is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that all matters can be finalised prior to the 80 year threshold. Leasehold Reform legislation entitles Fetcham qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention 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.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Fetcham 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.
Following unsuccessful correspondence with the landlord of her one bedroom flat in Fetcham, Isabella initiated the lease extension process as the 80 year threshold was quickly advancing. The transaction was finalised in July 2010. The freeholder’s charges were restricted to approximately 450 GBP.
Last March we were contacted by Mr and Mrs. S Scott , who completed a ground floor apartment in Fetcham in March 1999. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Similar properties in Fetcham with an extended lease were in the region of £225,400. The mid-range amount of ground rent was £45 invoiced per annum. The lease came to a finish in 2090. Considering the 64 years left we approximated the compensation to the landlord for the lease extension to be between £16,200 and £18,600 not including professional charges.
Ms B Roux acquired a one bedroom flat in Fetcham in August 1995. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by a further 90 years. Comparable premises in Fetcham with an extended lease were valued around £270,000. The average ground rent payable was £55 collected per annum. The lease came to a finish on 10 June 2101. Given that there were 75 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.