The re-sale value of a leasehold property in Midhurst is impacted by how many years the lease has remaining. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension before purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be finalised well before the eighty year mark. Statute enables Midhurst qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). 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.
Leasehold premises in Midhurst with over 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 undertake Midhurst 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.
After protracted discussions with the freeholder of her ground floor apartment in Midhurst, Zoe commenced the lease extension process as the 80 year mark was rapidly approaching. The lease extension was finalised in November 2005. The landlord’s costs were negotiated to slightly above 550 GBP.
In 2013 we were contacted by Dr Harvey Adams who, having purchased a basement flat in Midhurst in November 2006. We are asked if we could estimate the price could be for a ninety year extension to my lease. Similar residencies in Midhurst with an extended lease were worth £250,400. The average ground rent payable was £65 billed monthly. The lease terminated on 20 September 2090. Considering the 64 years left we approximated the premium to the landlord to extend the lease to be between £19,000 and £22,000 plus fees.
In 2014 we were phoned by Mr and Mrs. C Ricardo who, having bought a purpose-built flat in Midhurst in May 1995. The dilemma was if we could estimate the price would be to prolong the lease by an additional years. Comparable flats in Midhurst with a long lease were valued about £189,000. The average ground rent payable was £55 billed quarterly. The lease came to a finish on 28 June 2079. Having 53 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of costs.