The re-sale value of a leasehold property in Prescot is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended prior to buying. Ideally one should start the lease extension process when the lease still has 82 years to run so that formalities can be addressed well before the 80 year threshold. Leasehold Reform legislation enables Prescot qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a supplemental term of 90 years. The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Prescot with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges warrant it.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you increased control over the value of your Prescot leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Archie owned a 2 bedroom apartment in Prescot being marketed with a lease of a few days over 61 years left. Archie informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Archie to exercise his statutory right. Archie procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
In 2012 we were approached by Mrs K Rogers who, having bought a studio flat in Prescot in January 1998. The question was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Identical properties in Prescot with 100 year plus lease were worth £300,000. The average amount of ground rent was £50 collected monthly. The lease lapsed in 2100. Given that there were 75 years left we estimated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 not including costs.
In 2014 we were contacted by Mr and Mrs. P Williams who, having purchased a basement apartment in Prescot in July 2008. We are asked if we could estimate the premium would likely be to extend the lease by ninety years. Identical properties in Prescot with a long lease were valued around £250,400. The mid-range ground rent payable was £65 billed quarterly. The lease expired in 2089. Having 64 years as a residual term we estimated the premium to the landlord to extend the lease to be within £19,000 and £22,000 plus costs.