The re-sale value of a leasehold property in Ranmoor is impacted by 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 ahead of purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years to run so that formalities can be finalised prior to the eighty year threshold. Statute entitles Ranmoor qualifying lessees to obtain a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The purpose 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 considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancers that we work with procure Ranmoor lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last October Dexter, came dangerously close to the 80-year threshold with the lease on his basement flat in Ranmoor. In buying his home two decades ago, the unexpired term was of no relevance. by good luck, he noticed he would imminently be paying an inflated amount for a lease extension. Dexter extended the lease at the eleventh hour in July. Dexter and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If he not met the deadline, the price would have escalated by at least £1,000.
Mr N Cox purchased a purpose-built apartment in Ranmoor in November 2012. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by ninety years. Similar premises in Ranmoor with 100 year plus lease were valued about £270,000. The mid-range ground rent payable was £55 invoiced every twelve months. The lease finished on 14 February 2101. Considering the 75 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
Last month we were e-mailed by Dr Chloe Williams , who moved into a one bedroom flat in Ranmoor in June 2008. The question was if we could estimate the price would be for a ninety year lease extension. Comparable premises in Ranmoor with an extended lease were valued about £168,800. The mid-range amount of ground rent was £60 billed annually. The lease expired on 9 July 2081. Given that there were 55 years unexpired we calculated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 exclusive of legals.