The re-sale value of a leasehold property in Perton is impacted by how long the lease has left to run. If it is close to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before buying. It is ideal to start the process of extending the lease is when the lease still has 82 years unexpired so that formalities can be addressed well before the 80 year threshold. Current legislation entitles Perton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The intention 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 premises in Perton with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Perton leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Edward, came very near to the 80-year mark with the lease on his ground floor flat in Perton. Having purchased his flat 18 years previously, the length of the lease was of little importance. As luck would have it, it dawned on him that he needed to take action soon on a lease extension. Edward was able to extend his lease just under the wire in May. Edward and the freeholder in the end settled on an amount of £6,000 . If the lease had descended to less than eighty years, the sum would have increased by at least £1,000.
Mr and Mrs. R Bernard was assigned a lease of a newly refurbished flat in Perton in April 1996. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by 90 years. Comparative flats in Perton with 100 year plus lease were valued about £201,200. The mid-range ground rent payable was £55 invoiced per annum. The lease ran out on 5 March 2081. Given that there were 56 years outstanding we calculated the premium to the landlord to extend the lease to be within £31,400 and £36,200 plus professional charges.
Ms N Morgan purchased a studio apartment in Perton in February 2004. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Identical homes in Perton with an extended lease were valued about £300,000. The average amount of ground rent was £50 billed yearly. The lease elapsed on 1 August 2101. Given that there were 76 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including expenses.