The market value of a leasehold property in Great Baddow depends on how many years the lease has remaining. If it is close to or less than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be finalised well before the 80 year cut off point. Leasehold Reform legislation entitles Great Baddow qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years left 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 acquisition of the lease extension.
It is generally accepted that a property with over one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Great Baddow leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Isaac, came critically close to the 80-year mark with the lease on his garden apartment in Great Baddow. Having bought his property 18 years previously, the length of the lease was of minimal interest. Fortunately, he became aware that he needed to take steps soon on a lease extension. Isaac was able to extend his lease just under the wire in May. Isaac and the freeholder in the end agreed on sum of £5,000 . If he failed to meet the deadline, the sum would have increased by at least £1,125.
In 2009 we were e-mailed by Mrs Alicia Patel who, having owned a basement flat in Great Baddow in November 1999. We are asked if we could approximate the premium would be for a 90 year lease extension. Identical premises in Great Baddow with a long lease were worth £250,000. The mid-range ground rent payable was £50 billed per annum. The lease elapsed on 11 April 2094. Taking into account 69 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
In 2012 we were phoned by Dr T Hill who, having moved into a recently refurbished flat in Great Baddow in March 2010. The question was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparable properties in Great Baddow with an extended lease were in the region of £290,000. The mid-range amount of ground rent was £60 billed monthly. The lease came to a finish on 28 November 2105. Considering the 80 years left we estimated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including fees.