The market value of a leasehold property in Warlingham depends on how long the lease has left to run. If it is close to or fewer than 80 years you should foresee difficulties on re-sale, so it is advisable to arrange for a lease extension before purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be finalised in advance of the eighty year mark. Current legislation enables Warlingham qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Warlingham with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Warlingham 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 lawyer we work with provide it.
In the wake of eight months of lengthy discussions with the landlord of her ground floor flat in Warlingham, Erin commenced the lease extension process as the 80 year mark was quickly advancing. The transaction was finalised in June 2008. The landlord’s costs were negotiated to under 450 pounds.
Last Winter we were contacted by Dr O Thomas , who moved into a newly refurbished flat in Warlingham in May 1996. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable premises in Warlingham with an extended lease were valued about £290,000. The mid-range ground rent payable was £60 billed every twelve months. The lease ran out on 24 June 2106. Given that there were 80 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
An example of a Freehold Enfranchisement decision for a Warlingham property is The Woodlands 95 Purley Park Road in April 2009. The Tribunals own valuation produced the figure of £37,912. This case was in relation to 6 flats. The unexpired lease term was 78.32 years.