The market value of a leasehold property in Isle of Sheppey is impacted by how many years the lease has left to run. If it is near to or less than 80 years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be finalised well before the 80 year mark. Statute entitles Isle of Sheppey qualifying lessees to an additional term of ninety years on top of the unexpired term, at a nominal rent (no ground rent). 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 conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
Lease extensions in Isle of Sheppey can be a difficult process. We recommend you obtain guidance from a lawyer and valuer 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 Isle of Sheppey lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After unsuccessful discussions with the freeholder of her garden flat in Isle of Sheppey, Jasmine started the lease extension process as the eighty year deadline was fast coming. The legal work was concluded in June 2010. The landlord’s charges were kept to an absolute minimum.
Last Autumn we were phoned by Mr Joseph Green , who took over the lease of a studio flat in Isle of Sheppey in February 2000. We are asked if we could approximate the price would be to extend the lease by an additional years. Comparative residencies in Isle of Sheppey with a long lease were valued around £210,000. The average amount of ground rent was £50 invoiced every twelve months. The lease lapsed on 4 July 2105. Considering the 80 years outstanding we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.
In 2013 we were contacted by Mr and Mrs. G Baker who, having took over the lease of a ground floor flat in Isle of Sheppey in April 2011. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Identical premises in Isle of Sheppey with a long lease were valued about £275,000. The average ground rent payable was £45 collected monthly. The lease elapsed in 2094. Given that there were 69 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of fees.