The market value of a leasehold property in Mousehole is impacted by how long the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be concluded ahead of the eighty year threshold. Leasehold Reform legislation enables Mousehole 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 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 residential leasehold with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | |
| Chelsea Building Society | |
| Coventry Building Society | |
| Skipton Building Society | |
| Virgin |
The conveyancers that we work with handle Mousehole 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.
Last October Cameron, came precariously close to the eighty-year threshold with the lease on his purpose- built flat in Mousehole. In buying his flat two decades ago, the length of the lease was of little significance. As luck would have it, he noticed he would soon be paying an escalated premium for a lease extension. Cameron was able to extend his lease just in the nick of time last January. Cameron and the landlord subsequently settled on an amount of £5,500 . If the lease had slid lower than 80 years, the price would have escalated by at least £1,150.
Last Christmas we were e-mailed by Ms Holly Wright , who completed a ground floor flat in Mousehole in August 2011. The question was if we could approximate the compensation to the landlord would likely be for a 90 year lease extension. Identical residencies in Mousehole with 100 year plus lease were valued around £255,000. The average amount of ground rent was £50 invoiced monthly. The lease ended on 26 September 2096. Given that there were 70 years remaining we estimated the compensation to the freeholder for the lease extension to be between £10,500 and £12,000 exclusive of professional charges.
Last Christmas we were called by Mr and Mrs. M Torres , who purchased a one bedroom flat in Mousehole in August 1998. The question was if we could shed any light on how much (roughly) premium could be for a ninety year extension to my lease. Comparative premises in Mousehole with a long lease were in the region of £246,800. The average amount of ground rent was £60 collected yearly. The lease finished on 9 August 2076. Taking into account 50 years remaining we approximated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 exclusive of legals.