The market value of a leasehold property in Kinver depends on how long the lease has left to run. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be addressed prior to the eighty year mark. Statute enables Kinver qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
Using our service will provide you increased control over the value of your Kinver leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
16 months ago Lucas, came critically close to the 80-year mark with the lease on his garden flat in Kinver. Having bought his property two decades ago, the lease term was of little significance. Luckily, he realised he would soon be paying way over the odds for a lease extension. Lucas was able to extend his lease just in the nick of time in September. Lucas and the freeholder via the managing agents eventually settled on the final figure of £5,000 . If he failed to meet the deadline, the amount would have escalated by a minimum £1,025.
Last year we were e-mailed by Dr R Richardson , who completed a one bedroom apartment in Kinver in September 2005. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Comparative homes in Kinver with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 billed annually. The lease ended in 2100. Having 75 years left we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.
Last Spring we were phoned by Mr and Mrs. W Adams , who bought a newly refurbished apartment in Kinver in September 1998. We are asked if we could estimate the premium could be to extend the lease by 90 years. Identical premises in Kinver with a long lease were worth £168,800. The average amount of ground rent was £60 billed per annum. The lease came to a finish in 2080. Taking into account 55 years outstanding we approximated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus costs.