The market value of a leasehold property in Peterborough depends on how long the lease has left to run. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension before purchasing. Ideally one should start the lease extension process when the lease still has 82 years remaining so that all matters can be addressed well before the eighty year cut off point. Current legislation entitles Peterborough qualifying lessees to acquire a lease extension of 90 years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Regardless of whether you are a tenant or a landlord in Peterborough,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Peterborough valuers.
Last October Matthew, started to get near to the 80-year mark with the lease on his leasehold apartment in Peterborough. In buying his flat two decades ago, the lease term was of minimal concern. Luckily, he noticed he needed to take action soon on a lease extension. Matthew was able to extend his lease just ahead of time last March. Matthew and the landlord who owned the flat above eventually settled on a premium of £5,000 . If the lease had slipped lower than 80 years, the amount would have increased by at least £1,050.
Last Spring we were approach by Mr and Mrs. D Gómez , who acquired a one bedroom flat in Peterborough in March 2011. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Similar residencies in Peterborough with a long lease were worth £218,000. The average amount of ground rent was £45 invoiced quarterly. The lease lapsed on 18 August 2089. Given that there were 63 years as a residual term we calculated the premium to the landlord to extend the lease to be between £17,100 and £19,800 plus expenses.
In 2012 we were approached by Mr and Mrs. B Carter who, having acquired a ground floor flat in Peterborough in August 2012. We are asked if we could approximate the premium would likely be for a ninety year lease extension. Comparative properties in Peterborough with 100 year plus lease were in the region of £270,000. The mid-range ground rent payable was £55 collected per annum. The lease expired on 28 June 2100. Taking into account 74 years left we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.