The re-sale value of a leasehold property in Glenfield depends on how many years the lease has left to run. If it is near to or fewer than eighty years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. Ideally one should start the lease extension process when the lease still has 82 years to run so that formalities can be finalised prior to the 80 year cut off point. Current legislation entitles Glenfield qualifying lessees to an additional term of 90 years over and above the existing term, at a peppercorn rent (no ground rent). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Glenfield 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 lawyer we work with provide it.
In the wake of 6 months of protracted correspondence with the landlord of her first floor apartment in Glenfield, Victoria started the lease extension process just as her lease was coming close to the crucial eighty-year mark. The transaction was concluded in July 2007. The freeholder’s fees were negotiated to less than 500 GBP.
Mrs Poppy David purchased a garden flat in Glenfield in June 2011. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable properties in Glenfield with an extended lease were valued around £210,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease termination date was in 2105. Having 80 years unexpired we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of fees.
Last Autumn we were e-mailed by Dr Finn Lee , who took over the lease of a ground floor apartment in Glenfield in July 2012. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Glenfield with an extended lease were worth £275,000. The average ground rent payable was £45 collected monthly. The lease came to a finish on 28 November 2094. Considering the 69 years unexpired we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of expenses.