The market value of a leasehold property in Leatherhead depends on how many years the lease has left to run. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that all matters can be finalised ahead of the 80 year cut off point. Leasehold Reform legislation entitles Leatherhead qualifying lessees to an additional term of 90 years on top of the remaining term, at a nominal rent (zero ground rent). The reason 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 conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Leatherhead lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Following protracted negotiations with the freeholder of her two bedroom apartment in Leatherhead, Ellie started the lease extension process just as her lease was approaching the all-important eighty-year threshold. The legal work was finalised in July 2011. The freeholder’s fees were kept to an absolute minimum.
Last June we were approach by Dr E Turner , who took over the lease of a studio flat in Leatherhead in June 2000. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Identical flats in Leatherhead with an extended lease were in the region of £201,200. The mid-range ground rent payable was £55 invoiced yearly. The lease ran out in 2082. Considering the 56 years unexpired we approximated the premium to the landlord to extend the lease to be between £31,400 and £36,200 plus expenses.
Last Summer we were phoned by Dr Aaron Moreau , who took over the lease of a first floor flat in Leatherhead in January 1995. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Comparable properties in Leatherhead with a long lease were in the region of £300,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease lapsed in 2102. Having 76 years remaining we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.