The market value of a leasehold property in New Forest depends on how long the lease has left to run. If it is close to or fewer than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. Ideally one should start the process of extending the lease is when the lease still has 82 years to run so that a lease extension can be addressed in advance of the 80 year cut off point. Current legislation enables New Forest qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in New Forest with more than 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Irrespective of whether you are a tenant or a landlord in New Forest,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Forest valuers.
Leo was the the leasehold owner of a 2 bedroom apartment in New Forest on the market with a lease of a few days over 61 years unexpired. Leo informally approached his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and secured satisfactory deal informally and readily saleable.
Last Winter we were contacted by Mr and Mrs. Y Roux , who was assigned a lease of a one bedroom flat in New Forest in October 2008. The question was if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparative homes in New Forest with a long lease were worth £176,200. The mid-range amount of ground rent was £65 collected yearly. The lease concluded on 4 August 2081. Given that there were 56 years remaining we approximated the compensation to the freeholder to extend the lease to be between £29,500 and £34,000 plus legals.
In 2009 we were approached by Ms C Leroy who, having acquired a garden flat in New Forest in June 2008. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Identical homes in New Forest with a long lease were worth £237,600. The mid-range amount of ground rent was £45 billed every twelve months. The lease ended in 2092. Having 67 years left we approximated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 exclusive of costs.