The re-sale value of a leasehold property in Longfield depends on how long the lease has remaining. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is recommended to arrange for the lease to be extended before buying. Ideally one should start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be finalised well before the 80 year cut off point. Leasehold Reform legislation entitles Longfield 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 reason of the valuation is to determine 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 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Longfield 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 conveyancer we work with provide it.
Isaac was the the leasehold owner of a 2 bedroom flat in Longfield on the market with a lease of a little over 59 years remaining. Isaac on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Isaac to invoke his statutory right. Isaac obtained expert advice and was able to make an informed decision and deal with the matter and sell the flat.
In 2009 we were called by Mr T Gray who, having owned a studio apartment in Longfield in June 2004. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Longfield with a long lease were in the region of £245,000. The mid-range amount of ground rent was £50 collected yearly. The lease termination date was in 2094. Taking into account 68 years left we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 plus fees.
Mrs Lucy Clark bought a studio apartment in Longfield in January 2005. We are asked if we could estimate the price would be to prolong the lease by a further 90 years. Comparable properties in Longfield with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £55 billed annually. The lease finished on 8 March 2105. Having 79 years remaining we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 exclusive of expenses.