The re-sale value of a leasehold property in Reigate depends on how long the lease has left to run. If it is close to or less than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to start the lease extension process when a lease still has 82 years to run so that formalities can be addressed ahead of the 80 year mark. Leasehold Reform legislation enables Reigate qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Reigate with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with handle Reigate 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 conveyancer we work with provide it.
Subsequent to unsuccessful discussions with the freeholder of her purpose-built flat in Reigate, Niamh started the lease extension process as the eighty year threshold was rapidly approaching. The transaction was finalised in October 2006. The landlord’s fees were restricted to less than six hundred GBP.
Last Spring we were contacted by Dr C Garcia , who owned a garden apartment in Reigate in August 1998. We are asked if we could estimate the price could be for a ninety year extension to my lease. Comparable premises in Reigate with an extended lease were in the region of £198,800. The average ground rent payable was £55 invoiced quarterly. The lease ended in 2080. Taking into account 55 years remaining we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 not including fees.
In 2014 we were contacted by Dr Laura Khan who, having completed a studio apartment in Reigate in August 1996. The question was if we could estimate the premium would be to extend the lease by ninety years. Identical properties in Reigate with 100 year plus lease were valued around £295,000. The average amount of ground rent was £50 invoiced yearly. The lease expired on 16 October 2100. Given that there were 75 years outstanding we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.