The re-sale value of a leasehold property in Nafferton is impacted by how many years the lease has left to run. If it is near to or less than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that formalities can be finalised in advance of the eighty year cut off point. Current legislation enables Nafferton qualifying lessees to acquire 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 amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
Retaining our service will provide you better control over the value of your Nafferton leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Rory, came critically close to the 80-year threshold with the lease on his one bedroom apartment in Nafferton. Having bought his home two decades ago, the length of the lease was of minimal bearing. Fortunately, it dawned on him that he would soon be paying an inflated amount for a lease extension. Rory extended the lease just under the wire last January. Rory and the freeholder via the managing agents ultimately settled on an amount of £5,000 . If he failed to meet the deadline, the premium would have escalated by a minimum £1,025.
In 2014 we were phoned by Dr Y Phillips who, having owned a purpose-built flat in Nafferton in April 1997. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparable residencies in Nafferton with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 collected yearly. The lease expired on 28 January 2094. Having 69 years unexpired we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus fees.
Last Spring we were e-mailed by Ms G Jones , who bought a garden apartment in Nafferton in February 2007. The question was if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Similar residencies in Nafferton with 100 year plus lease were valued about £285,000. The average amount of ground rent was £55 invoiced annually. The lease expired on 16 January 2105. Given that there were 80 years remaining we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.