The re-sale value of a leasehold property in Garforth depends on how many years the lease has left to run. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is ideal to start the lease extension process when a lease still has 82 years remaining so that all matters can be addressed prior to the 80 year mark. Current legislation entitles Garforth qualifying lessees to an additional term of 90 years in addition to the unexpired term, at a nominal rent (no ground rent). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Garforth with more than one hundred years left on the lease are often 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 buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Garforth 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 conveyancing solicitor we work with provide it.
Theo owned a conversion apartment in Garforth being marketed with a lease of just over 61 years left. Theo on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Theo to invoke his statutory right. Theo procured expert legal guidance and was able to make a more informed judgement and deal with the matter and sell the property.
Mrs E Cooper completed a purpose-built flat in Garforth in May 2005. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative premises in Garforth with 100 year plus lease were valued around £240,600. The average ground rent payable was £60 invoiced every twelve months. The lease finished on 4 May 2087. Given that there were 62 years remaining we estimated the premium to the landlord to extend the lease to be between £21,900 and £25,200 plus costs.
In 2009 we were called by Mr Jamie Bernard who, having completed a purpose-built flat in Garforth in October 2008. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Garforth with a long lease were in the region of £174,200. The mid-range amount of ground rent was £55 collected yearly. The lease expiry date was in 2076. Taking into account 51 years unexpired we estimated the premium to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of fees.