The re-sale value of a leasehold property in Garston is impacted by how long the lease has remaining. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension before purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that all matters can be addressed in advance of the eighty year cut off point. Current legislation enables Garston qualifying lessees to a 90 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 purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom 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 any lease with more than 45 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
Retaining our service gives you better control over the value of your Garston leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Matthew owned a high value apartment in Garston being marketed with a lease of a few days over sixty years unexpired. Matthew informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Matthew to invoke his statutory right. Matthew obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
Last year we were called by Mr W Nguyen , who moved into a one bedroom apartment in Garston in June 2011. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by a further 90 years. Similar flats in Garston with 100 year plus lease were valued around £225,800. The average ground rent payable was £60 collected yearly. The lease end date was on 5 January 2085. Taking into account 60 years left we estimated the premium to the freeholder for the lease extension to be within £24,700 and £28,600 not including professional charges.
Mr and Mrs. M Fournier completed a recently refurbished apartment in Garston in May 2006. The dilemma was if we could approximate the premium would be for a 90 year lease extension. Similar premises in Garston with 100 year plus lease were valued around £210,000. The mid-range amount of ground rent was £50 billed yearly. The lease terminated in 2105. Having 80 years remaining we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 plus professional charges.