The market value of a leasehold property in Southwick depends on how many years the lease has left to run. If it is near to or less than eighty years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to commence the lease extension process when the lease still has 82 years unexpired so that a lease extension can be finalised well before the eighty year mark. Leasehold Reform legislation entitles Southwick qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of 90 years. The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Southwick,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 Southwick valuers.
Henry was the the leasehold owner of a studio apartment in Southwick on the market with a lease of a little over 59 years remaining. Henry informally approached his freeholder being a well known London-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be due on a lease extension were Henry to exercise his statutory right. Henry procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Mr O Jackson moved into a basement flat in Southwick in November 2006. We are asked if we could estimate the premium would be for a 90 year lease extension. Identical flats in Southwick with a long lease were worth £256,600. The mid-range ground rent payable was £60 invoiced annually. The lease lapsed on 13 November 2078. Considering the 52 years outstanding we approximated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 exclusive of professional charges.
Last year we were approach by Mr W Khan , who acquired a garden flat in Southwick in January 2012. The question was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Similar properties in Southwick with an extended lease were in the region of £218,000. The average ground rent payable was £45 billed per annum. The lease elapsed on 24 November 2089. Having 63 years outstanding we calculated the premium to the freeholder to extend the lease to be between £17,100 and £19,800 not including legals.