The market value of a leasehold property in Reading is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable 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 finalised well before the 80 year cut off point. Statute enables Reading qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). 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 property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Reading can be a difficult process. We recommend you obtain professional help from a lawyer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Reading lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Ollie was the the leasehold owner of a conversion flat in Reading being sold with a lease of fraction over 72 years outstanding. Ollie on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ollie to invoke his statutory right. Ollie obtained expert advice and secured an acceptable resolution informally and sell the flat.
Dr Amber Brown completed a studio flat in Reading in August 2008. The question was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative premises in Reading with a long lease were worth £285,000. The average amount of ground rent was £45 collected every twelve months. The lease lapsed on 7 July 2097. Considering the 72 years remaining we approximated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including fees.
Mrs Maisie Flores took over the lease of a first floor flat in Reading in May 2006. We are asked if we could approximate the premium would likely be to prolong the lease by an additional years. Identical homes in Reading with 100 year plus lease were valued about £233,200. The mid-range amount of ground rent was £60 collected quarterly. The lease concluded in 2086. Having 61 years left we approximated the compensation to the freeholder for the lease extension to be between £22,800 and £26,400 not including fees.