The re-sale value of a leasehold property in Leatherhead depends on how many years the lease has remaining. If it is close to or less than 80 years you should expect 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 lease extension process when a lease still has 82 years remaining so that a lease extension can be finalised in advance of the 80 year threshold. Leasehold Reform legislation enables Leatherhead qualifying lessees to an additional term of ninety years over and above the existing term, at a peppercorn rent (zero ground rent). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Leatherhead,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Leatherhead valuers.
Half a year ago Andrew, started to get close to the eighty-year threshold with the lease on his garden apartment in Leatherhead. Having purchased his property twenty years ago, the lease term was of little relevance. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Andrew was able to extend his lease at the eleventh hour in March. Andrew and the landlord in the end settled on a premium of £5,000 . If he had missed the deadline, the figure would have escalated by a minimum £900.
Mr Cameron Michel took over the lease of a purpose-built flat in Leatherhead in July 2003. We are asked if we could estimate the price could be to extend the lease by 90 years. Identical residencies in Leatherhead with 100 year plus lease were valued around £243,000. The mid-range ground rent payable was £65 billed monthly. The lease ended in 2089. Having 63 years left we estimated the premium to the landlord to extend the lease to be within £20,000 and £23,000 not including professional charges.
Last Autumn we were phoned by Mrs S Scott , who moved into a one bedroom flat in Leatherhead in April 1999. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Comparative premises in Leatherhead with a long lease were worth £181,600. The mid-range ground rent payable was £55 collected quarterly. The lease came to a finish in 2078. Taking into account 52 years unexpired we approximated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of legals.