The re-sale value of a leasehold property in Garston is impacted by how many years the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years to run so that all matters can be finalised prior to the eighty year threshold. Current legislation enables Garston qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| 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 |
| 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 handle Garston 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.
Last year Tommy, came very near to the eighty-year threshold with the lease on his two bedroom flat in Garston. Having purchased his home 18 years ago, the unexpired term was of little interest. Thankfully, he became aware that he would soon be paying way over the odds for Extending the lease. Tommy was able to extend his lease at the eleventh hour last July. Tommy and the freeholder via the management company subsequently agreed on sum of £5,000 . If he not met the deadline, the premium would have become more costly by at least £1,075.
In 2013 we were e-mailed by Mrs Kayleigh Rogers who, having moved into a one bedroom flat in Garston in September 2011. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Identical premises in Garston with 100 year plus lease were valued around £191,400. The average ground rent payable was £55 billed yearly. The lease elapsed in 2080. Considering the 54 years outstanding we estimated the premium to the landlord to extend the lease to be between £34,200 and £39,600 not including costs.
Last June we were e-mailed by Mr and Mrs. D Moore , who moved into a first floor apartment in Garston in June 2009. The dilemma was if we could approximate the price would likely be to prolong the lease by ninety years. Comparable residencies in Garston with 100 year plus lease were valued around £295,000. The mid-range amount of ground rent was £45 invoiced every twelve months. The lease finished in 2100. Having 74 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.