The market value of a leasehold property in Kingsbridge depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended before purchasing. It is preferable to commence the lease extension process when a lease still has 82 years to run so that formalities can be finalised in advance of the 80 year mark. Statute entitles Kingsbridge qualifying lessees to acquire a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Kingsbridge 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.
Last Christmas Oscar, came very near to the eighty-year threshold with the lease on his basement apartment in Kingsbridge. Having bought his flat 18 years previously, the length of the lease was of minimal interest. Fortunately, he noticed he needed to take action soon on a lease extension. Oscar arranged for a lease extension just in the nick of time last May. Oscar and the landlord subsequently settled on an amount of £6,000 . If the lease had slipped to less than 80 years, the sum would have escalated by at least £975.
In 2009 we were contacted by Mr and Mrs. E Wright who, having owned a basement flat in Kingsbridge in January 2002. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Identical premises in Kingsbridge with an extended lease were worth £233,200. The average amount of ground rent was £60 collected every twelve months. The lease concluded on 1 October 2085. Given that there were 61 years outstanding we approximated the compensation to the landlord for the lease extension to be between £22,800 and £26,400 plus expenses.
In 2009 we were called by Mrs Ellen Ward who, having purchased a one bedroom flat in Kingsbridge in October 1999. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Identical residencies in Kingsbridge with 100 year plus lease were in the region of £166,800. The mid-range amount of ground rent was £50 collected yearly. The lease expired on 15 July 2074. Given that there were 50 years outstanding we estimated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 plus expenses.