The market value of a leasehold property in Ruddington depends on how long the lease has remaining. If it is near to or less than 80 years you should foresee problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years remaining so that all matters can be finalised prior to the 80 year threshold. Leasehold Reform legislation enables Ruddington 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 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 property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be equivalent in value to 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Ruddington,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ruddington valuers.
Two years ago Connor, started to get near to the 80-year mark with the lease on his basement apartment in Ruddington. In buying his flat two decades ago, the lease term was of little importance. Fortunately, he became aware that he needed to take action soon on a lease extension. Connor arranged for a lease extension just under the wire last April. Connor and the landlord who owned the flat above eventually agreed on an amount of £6,000 . If the lease had slipped lower than 80 years, the sum would have escalated by at least £1,050.
Last Christmas we were called by Mrs K Díaz , who was assigned a lease of a ground floor flat in Ruddington in April 2011. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Comparable residencies in Ruddington with a long lease were in the region of £191,400. The average ground rent payable was £55 invoiced annually. The lease came to a finish on 15 February 2079. Considering the 54 years remaining we calculated the premium to the freeholder to extend the lease to be within £34,200 and £39,600 plus professional charges.
Last Autumn we were contacted by Dr P Sánchez , who bought a ground floor flat in Ruddington in July 2003. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar properties in Ruddington with an extended lease were valued around £295,000. The mid-range amount of ground rent was £45 collected quarterly. The lease expired in 2099. Taking into account 74 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.