The market value of a leasehold property in Southwater is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should expect problems 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 the lease still has 82 years unexpired so that all matters can be finalised in advance of the eighty year mark. Statute enables Southwater qualifying lessees to an additional term of 90 years on top of the unexpired term, at a peppercorn rent (zero ground rent). 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 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 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you better control over the value of your Southwater leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted discussions with the freeholder of her leasehold flat in Southwater, Molly initiated the lease extension process as the eighty year threshold was swiftly approaching. The transaction completed in February 2005. The landlord’s costs were negotiated to slightly above 600 pounds.
In 2012 we were contacted by Dr N Cooper who, having moved into a recently refurbished apartment in Southwater in April 1998. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by a further 90 years. Comparable properties in Southwater with a long lease were valued around £200,000. The average ground rent payable was £50 invoiced every twelve months. The lease concluded in 2102. Taking into account 77 years left we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.
Last Winter we were e-mailed by Mrs J Clark , who owned a purpose-built apartment in Southwater in June 2008. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Comparable premises in Southwater with a long lease were worth £260,200. The average amount of ground rent was £65 collected per annum. The lease came to a finish on 9 November 2091. Taking into account 66 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 not including fees.