The market value of a leasehold property in Ruddington is impacted by how long the lease has remaining. If it is close to or less than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to start the lease extension process when a lease still has 82 years to run so that a lease extension can be finalised ahead of the eighty year cut off point. Statute enables Ruddington qualifying lessees to an additional term of ninety years in addition to the unexpired term, at a nominal rent (zero ground rent). The intention of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold properties in Ruddington with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Regardless of whether you are a tenant or a landlord in Ruddington,the lease extension lawyers 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 Ruddington valuers.
In recent months Reuben, started to get close to the eighty-year threshold with the lease on his purpose- built flat in Ruddington. In buying his flat 18 years ago, the unexpired term was of minimal concern. Thankfully, it dawned on him that he needed to take steps soon on a lease extension. Reuben was able to extend his lease just ahead of time last July. Reuben and the landlord who owned the flat above subsequently agreed on an amount of £5,000 . If he failed to meet the deadline, the sum would have increased by at least £1,125.
In 2014 we were called by Mrs Kirsty Mitchell who, having owned a ground floor flat in Ruddington in July 2006. The question was if we could estimate the premium would be to extend the lease by an additional years. Similar flats in Ruddington with a long lease were valued about £218,400. The mid-range ground rent payable was £60 collected annually. The lease lapsed in 2085. Given that there were 59 years left we estimated the premium to the freeholder for the lease extension to be within £27,600 and £31,800 not including expenses.
Last Summer we were called by Mr C Hall , who bought a recently refurbished flat in Ruddington in March 1997. We are asked if we could shed any light on how much (approximately) price would likely be to prolong the lease by 90 years. Similar flats in Ruddington with an extended lease were worth £205,000. The average amount of ground rent was £50 collected yearly. The lease expired in 2105. Taking into account 79 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £7,600 and £8,800 exclusive of expenses.