The re-sale value of a leasehold property in Littleport depends on how long the lease has remaining. If it is near to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is ideal to start the process of extending the lease is when the lease still has 82 years to run so that all matters can be addressed in advance of the 80 year threshold. Statute enables Littleport 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 reason of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Littleport 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.
Arthur was the the leasehold proprietor of a conversion flat in Littleport being marketed with a lease of fraction over 61 years outstanding. Arthur informally approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £200 yearly. No ground rent would be payable on a lease extension were Arthur to exercise his statutory right. Arthur obtained expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2011 we were called by Mr and Mrs. E Cook who, having purchased a one bedroom flat in Littleport in November 1999. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Littleport with 100 year plus lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected yearly. The lease came to a finish in 2103. Given that there were 77 years remaining we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.
Last Spring we were phoned by Dr M Patel , who owned a one bedroom flat in Littleport in September 2003. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in Littleport with 100 year plus lease were worth £260,200. The mid-range amount of ground rent was £65 collected yearly. The lease ended in 2092. Considering the 66 years unexpired we estimated the compensation to the landlord to extend the lease to be between £16,200 and £18,600 plus fees.