The market value of a leasehold property in Sneinton is impacted by how long the lease has left to run. If it is close to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be addressed ahead of the eighty year mark. Statute enables Sneinton qualifying lessees to a ninety year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose 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.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| 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. |
The conveyancers that we work with procure Sneinton 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.
Eli was the the leasehold proprietor of a high value apartment in Sneinton on the market with a lease of a few days over 72 years outstanding. Eli on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Eli to exercise his statutory right. Eli procured expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Ms Bethan Laurent bought a one bedroom flat in Sneinton in March 2004. The dilemma was if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Comparable homes in Sneinton with an extended lease were valued about £240,600. The mid-range ground rent payable was £60 collected per annum. The lease came to a finish on 14 June 2087. Considering the 62 years remaining we calculated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of legals.
Last Autumn we were e-mailed by Mr I Clarke , who was assigned a lease of a ground floor apartment in Sneinton in October 2009. We are asked if we could approximate the price would be for a ninety year extension to my lease. Similar properties in Sneinton with an extended lease were valued about £174,200. The mid-range amount of ground rent was £55 invoiced per annum. The lease came to a finish in 2076. Given that there were 51 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus costs.