The market value of a leasehold property in Park Hill depends on how long the lease has remaining. If it is near to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be addressed ahead of the eighty year threshold. Current legislation enables Park Hill qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Park Hill with over 100 years outstanding 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 premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Engaging our service gives you better control over the value of your Park Hill leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to unsuccessful correspondence with the freeholder of her leasehold flat in Park Hill, Amelia commenced the lease extension process just as the lease was coming close to the crucial 80-year deadline. The legal work completed in June 2007. The freeholder’s fees were kept to an absolute minimum.
Mr and Mrs. P Morel moved into a one bedroom apartment in Park Hill in June 2003. We are asked if we could approximate the compensation to the landlord could be for a 90 year lease extension. Similar homes in Park Hill with 100 year plus lease were valued about £275,000. The average amount of ground rent was £65 billed monthly. The lease ran out on 15 March 2094. Taking into account 68 years outstanding we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 exclusive of costs.
Dr Freddie Wright acquired a ground floor apartment in Park Hill in September 2011. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Comparative flats in Park Hill with 100 year plus lease were in the region of £213,600. The mid-range ground rent payable was £60 invoiced monthly. The lease expiry date was on 10 November 2083. Having 57 years outstanding we calculated the premium to the landlord for the lease extension to be between £30,400 and £35,200 not including expenses.