The market value of a leasehold property in Longford is impacted by how long the lease has left to run. If it is close to or less than 80 years you should anticipate problems on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to start the process of extending the lease is when the lease still has 82 years to run so that formalities can be finalised prior to the eighty year threshold. Leasehold Reform legislation enables Longford qualifying lessees to obtain a lease extension of ninety years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). 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.
Leasehold residencies in Longford with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The conveyancers that we work with procure Longford 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.
Half a year ago Jack, came dangerously near to the eighty-year threshold with the lease on his two bedroom flat in Longford. In buying his flat twenty years previously, the lease term was of no relevance. As luck would have it, he realised he needed to take action soon on a lease extension. Jack extended the lease at the eleventh hour in April. Jack and the landlord who owned the flat above eventually settled on an amount of £5,000 . If he not met the deadline, the figure would have increased by a minimum £1,025.
Last month we were e-mailed by Mr and Mrs. E Young , who acquired a one bedroom apartment in Longford in June 2001. We are asked if we could approximate the price could be for a 90 year lease extension. Identical residencies in Longford with 100 year plus lease were worth £255,000. The mid-range ground rent payable was £50 collected monthly. The lease expired in 2095. Having 70 years outstanding we estimated the premium to the landlord to extend the lease to be within £10,500 and £12,000 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Longford premises is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The unexpired lease term was 69 years.