The market value of a leasehold property in Warwick depends on how many years the lease has remaining. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years unexpired so that all matters can be concluded in advance of the eighty year mark. Statute enables Warwick qualifying lessees to an additional term of 90 years on top of the unexpired term, at a notional 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.
Leasehold premises in Warwick with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Warwick,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 experience and the close ties they enjoy with Warwick valuers.
Evan was the the leasehold proprietor of a studio flat in Warwick on the market with a lease of a little over fifty eight years remaining. Evan on an informal basis contacted his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Evan to exercise his statutory right. Evan obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
In 2013 we were approached by Mr and Mrs. S Scott who, having acquired a basement apartment in Warwick in June 1999. We are asked if we could approximate the premium would be to extend the lease by ninety years. Similar homes in Warwick with an extended lease were valued around £280,000. The mid-range ground rent payable was £45 collected per annum. The lease ran out in 2094. Considering the 69 years left we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus costs.
In 2010 we were contacted by Ms N White who, having was assigned a lease of a ground floor apartment in Warwick in November 2003. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar premises in Warwick with 100 year plus lease were worth £216,000. The mid-range amount of ground rent was £60 invoiced monthly. The lease concluded on 17 June 2083. Considering the 58 years as a residual term we estimated the premium to the landlord to extend the lease to be between £28,500 and £33,000 not including fees.