The market value of a leasehold property in Nether Edge is impacted by how long the lease has remaining. If it is close to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years unexpired so that formalities can be concluded ahead of the 80 year threshold. Current legislation enables Nether Edge qualifying lessees to obtain a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Nether Edge with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 conveyancing solicitors that we work with undertake Nether Edge 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.
After unsuccessful discussions with the landlord of her studio apartment in Nether Edge, Ashleigh started the lease extension process as the 80 year deadline was quickly nearing. The legal work completed in February 2015. The freeholder’s fees were negotiated to slightly above 550 GBP.
Last Autumn we were contacted by Dr S Laurent , who took over the lease of a one bedroom flat in Nether Edge in November 2002. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparable flats in Nether Edge with a long lease were valued around £300,000. The mid-range ground rent payable was £50 billed monthly. The lease terminated in 2101. Considering the 76 years remaining we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of legals.
Mr and Mrs. C Cox moved into a one bedroom flat in Nether Edge in November 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparative residencies in Nether Edge with a long lease were worth £260,200. The mid-range amount of ground rent was £65 collected monthly. The lease termination date was in 2091. Considering the 66 years left we calculated the compensation to the landlord for the lease extension to be within £16,200 and £18,600 plus legals.