The market value of a leasehold property in Montgomery depends on how long the lease has left to run. If it is close to or less than 80 years you should expect problems on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is ideal to start the lease extension process when a lease still has 82 years to run so that formalities can be finalised in advance of the 80 year cut off point. Leasehold Reform legislation enables Montgomery qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 conveyancers that we work with procure Montgomery 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 conveyancing solicitor we work with provide it.
Andrew owned a high value flat in Montgomery on the market with a lease of fraction over 72 years outstanding. Andrew on an informal basis spoke with his freeholder being a well known London-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert advice and secured an acceptable resolution informally and sell the property.
Mr Kyle Adams took over the lease of a newly refurbished apartment in Montgomery in November 2004. The dilemma was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparable homes in Montgomery with a long lease were worth £183,600. The mid-range ground rent payable was £65 invoiced every twelve months. The lease ended in 2082. Taking into account 57 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 exclusive of fees.
Dr M Flores purchased a one bedroom apartment in Montgomery in August 1998. The dilemma was if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical homes in Montgomery with 100 year plus lease were worth £245,000. The mid-range amount of ground rent was £50 invoiced quarterly. The lease came to a finish in 2093. Considering the 68 years outstanding we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.