The market value of a leasehold property in Ilminster depends on how long the lease has left to run. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the process of extending the lease is when the lease still has 82 years unexpired so that a lease extension can be concluded ahead of the 80 year threshold. Statute entitles Ilminster qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a property with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 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. |
| Godiva Mortgages | 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. |
| Yorkshire Building Society | 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. |
Retaining our service gives you better control over the value of your Ilminster leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful negotiations with the freeholder of her ground floor flat in Ilminster, Erin started the lease extension process as the eighty year threshold was quickly approaching. The transaction completed in January 2010. The landlord’s charges were restricted to slightly above four hundred GBP.
In 2010 we were contacted by Dr Natasha Lee who, having acquired a newly refurbished flat in Ilminster in November 2012. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Similar properties in Ilminster with 100 year plus lease were in the region of £230,800. The average amount of ground rent was £60 billed quarterly. The lease finished in 2086. Having 60 years remaining we estimated the premium to the freeholder to extend the lease to be between £24,700 and £28,600 exclusive of fees.
Mr and Mrs. L Lefèvre purchased a recently refurbished flat in Ilminster in August 1998. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Identical flats in Ilminster with a long lease were worth £210,000. The average ground rent payable was £50 billed every twelve months. The lease terminated on 26 October 2106. Given that there were 80 years unexpired we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus professional charges.