The market value of a leasehold property in Long Sutton depends on how long the lease has left to run. If it is close to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is preferable to start the lease extension process when a lease still has 82 years remaining so that formalities can be concluded prior to the 80 year cut off point. Current legislation enables Long Sutton qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with procure Long Sutton 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 lawyer we work with provide it.
In the wake of 9 months of protracted correspondence with the freeholder of her basement flat in Long Sutton, Daisy commenced the lease extension process just as her lease was approaching the crucial eighty-year deadline. The lease extension completed in March 2005. The landlord’s fees were kept to an absolute minimum.
Last month we were contacted by Mr and Mrs. V Carter , who acquired a purpose-built apartment in Long Sutton in September 1999. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Comparable properties in Long Sutton with an extended lease were valued about £213,600. The mid-range ground rent payable was £60 invoiced monthly. The lease lapsed on 3 January 2083. Given that there were 57 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 plus legals.
Last Christmas we were contacted by Mr and Mrs. U Bennett , who completed a newly refurbished flat in Long Sutton in September 2000. We are asked if we could estimate the price could be to prolong the lease by an additional years. Comparable premises in Long Sutton with an extended lease were worth £200,000. The average amount of ground rent was £50 billed every twelve months. The lease termination date was on 2 February 2104. Having 78 years left we estimated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus legals.