The re-sale value of a leasehold property in Leicester depends on how many years the lease has left to run. If it is near to or less than eighty years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be finalised in advance of the 80 year mark. Leasehold Reform legislation enables Leicester qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a landlord in Leicester,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Leicester valuers.
Luca owned a studio flat in Leicester being marketed with a lease of just over sixty years outstanding. Luca informally approached his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Luca to exercise his statutory right. Luca procured expert advice and was able to make a more informed decision and deal with the matter and readily saleable.
Last Summer we were called by Mrs Y Gómez , who bought a ground floor flat in Leicester in February 2008. We are asked if we could approximate the premium would be for a 90 year lease extension. Similar residencies in Leicester with 100 year plus lease were valued around £196,400. The mid-range amount of ground rent was £55 collected every twelve months. The lease terminated on 16 November 2080. Considering the 54 years outstanding we calculated the premium to the landlord to extend the lease to be within £35,200 and £40,600 exclusive of professional charges.
In 2014 we were contacted by Dr C Flores who, having purchased a garden apartment in Leicester in September 2008. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Comparative residencies in Leicester with an extended lease were worth £295,000. The mid-range amount of ground rent was £45 billed annually. The lease lapsed in 2101. Given that there were 75 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus professional charges.