The market value of a leasehold property in Wells is impacted by how long the lease has remaining. If it is close to or less than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that all matters can be addressed well before the eighty year cut off point. Current legislation enables Wells qualifying lessees to an additional term of 90 years over and above the remaining term, at a notional rent (no ground rent). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 increased control over the value of your Wells leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of unsuccessful negotiations with the landlord of her studio flat in Wells, Francesca commenced the lease extension process just as her lease was coming close to the crucial 80-year deadline. The transaction was finalised in September 2009. The landlord’s costs were kept to an absolute minimum.
In 2009 we were approached by Dr Nathan Collins who, having took over the lease of a basement flat in Wells in April 2000. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Similar flats in Wells with 100 year plus lease were in the region of £246,800. The mid-range ground rent payable was £60 invoiced per annum. The lease elapsed in 2076. Given that there were 50 years unexpired we estimated the premium to the landlord for the lease extension to be between £44,700 and £51,600 exclusive of costs.
Last Summer we were contacted by Mr and Mrs. B Sharif , who bought a recently refurbished apartment in Wells in September 1996. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable properties in Wells with an extended lease were in the region of £203,200. The average ground rent payable was £65 invoiced yearly. The lease concluded in 2087. Considering the 61 years as a residual term we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 plus professional charges.