The market value of a leasehold property in Hereford is impacted by how many years the lease has left to run. If it is close to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is preferable to commence the lease extension process when a lease still has 82 years to run so that all matters can be concluded prior to the 80 year mark. Statute entitles Hereford qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Hereford can be a difficult process. We recommend you secure professional help from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Hereford lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Riley owned a high value flat in Hereford on the market with a lease of a few days over sixty years remaining. Riley informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. No ground rent would be due on a lease extension were Riley to exercise his statutory right. Riley procured expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Last Spring we were phoned by Mr and Mrs. T Campbell , who acquired a purpose-built flat in Hereford in September 2012. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparative properties in Hereford with an extended lease were valued around £210,000. The average amount of ground rent was £50 collected quarterly. The lease expired on 13 January 2106. Having 80 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus expenses.
Dr M Moore took over the lease of a basement flat in Hereford in November 2005. We are asked if we could approximate the premium would be for a ninety year lease extension. Comparative properties in Hereford with a long lease were valued about £275,000. The average amount of ground rent was £45 billed yearly. The lease finished on 27 June 2095. Taking into account 69 years remaining we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including costs.