The market value of a leasehold property in New Southgate depends on how long the lease has left to run. If it is near to or fewer than eighty years you should foresee difficulties 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 the lease still has 82 years unexpired so that formalities can be addressed well before the eighty year cut off point. Statute entitles New Southgate qualifying lessees to an additional term of 90 years in addition to the remaining term, at a nominal rent (no ground rent). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in New Southgate,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with New Southgate valuers.
Two years ago Eli, came precariously near to the eighty-year threshold with the lease on his basement apartment in New Southgate. Having purchased his flat twenty years previously, the length of the lease was of little importance. Thankfully, it dawned on him that he needed to take steps soon on a lease extension. Eli was able to extend his lease just under the wire last June. Eli and the freeholder eventually agreed on an amount of £5,500 . If the lease had fallen to less than eighty years, the premium would have become more exhorbitant by a minimum £1,075.
Mr and Mrs. M Roberts acquired a purpose-built flat in New Southgate in February 2007. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar premises in New Southgate with a long lease were valued around £233,200. The average amount of ground rent was £60 billed monthly. The lease elapsed on 22 October 2087. Considering the 61 years outstanding we estimated the compensation to the landlord for the lease extension to be between £22,800 and £26,400 plus expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a New Southgate flat is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case related to 2 flats. The remaining number of years on the lease was 70.31 years.