The re-sale value of a leasehold property in Watnall is impacted by how many years the lease has left to run. If it is close to or less than eighty years you should anticipate problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be concluded well before the 80 year threshold. Current legislation enables Watnall qualifying lessees to an additional term of 90 years in addition to the remaining term, at a nominal 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 residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with procure Watnall 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 conveyancing solicitor we work with provide it.
Joshua owned a high value apartment in Watnall being sold with a lease of just over 61 years unexpired. Joshua on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 yearly. No ground rent would be due on a lease extension were Joshua to invoke his statutory right. Joshua procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2013 we were contacted by Mr and Mrs. H Robinson who, having acquired a garden flat in Watnall in November 1998. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative premises in Watnall with a long lease were worth £210,600. The average ground rent payable was £45 collected yearly. The lease concluded in 2088. Taking into account 62 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 not including fees.
Last year we were phoned by Mr L Mason , who purchased a basement apartment in Watnall in July 2010. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Identical properties in Watnall with 100 year plus lease were valued around £265,000. The mid-range ground rent payable was £50 billed yearly. The lease ended on 12 May 2099. Taking into account 73 years remaining we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus costs.