The market value of a leasehold property in Portsmouth depends on how long the lease has left to run. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension prior to buying. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that a lease extension can be concluded in advance of the eighty year mark. Leasehold Reform legislation entitles Portsmouth qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a further term of 90 years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Portsmouth,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Portsmouth valuers.
Dexter owned a studio flat in Portsmouth being sold with a lease of fraction over sixty years unexpired. Dexter informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be due on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and secured an acceptable deal informally and sell the flat.
Last Winter we were phoned by Dr E Petit , who moved into a purpose-built flat in Portsmouth in June 1995. We are asked if we could approximate the price would be for a 90 year extension to my lease. Similar residencies in Portsmouth with an extended lease were worth £193,400. The average ground rent payable was £65 invoiced quarterly. The lease end date was in 2085. Given that there were 59 years outstanding we calculated the premium to the landlord for the lease extension to be between £21,900 and £25,200 plus costs.
In 2012 we were phoned by Mr H Campbell who, having was assigned a lease of a first floor flat in Portsmouth in April 2001. The question was if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Identical homes in Portsmouth with an extended lease were worth £250,000. The mid-range ground rent payable was £50 billed quarterly. The lease expired on 12 November 2095. Taking into account 69 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.