Lease Extension Valuations

If you are a leaseholder of a flat or maisonette and are seeking to obtain an extension on the remaining term of the lease you will require a lease extension valuation.

When you own a leasehold property, you own the right to live that property for a set time, but do not own the land that it sits on. This is owned by the freeholder who charges a ground rent. In theory, when the lease ends the property is returned to the freeholder. Under the Leasehold Reform, Housing and Urban Development Act 1993, leasehold owners are entitled to a 90 year lease extension at a fair market rent. Under the current guidelines, you must have owned the property for a minimum of 2 years before the lease can be extended.

A lease extension valuer will be able to advise you of how much of premium you will pay to the freeholder or landlord. This is the price to compensate for the extra years on the lease.

It is advisable to extend if there is less than 90 years left on the lease. Once less than 80 years is remaining, you would need to pay 50% of the property’s ‘marriage value’ in addition to the cost of extending the lease. Marriage value is the amount that property value increases as a result of the extension.

A long lease can increase a property’s value and increase’s its appeal to purchasers. Properties with shorter leases can be difficult to sell or remortage. Mortgage lenders tend to be reluctant to provide a loan for a property with a short lease as its value may decline.

Readings Property Group has specialist surveyors who can undertake a valuation of the leasehold property to advise what the value of the premium should be.

After inspecting the property we consider:

• The current market value of the property
• The future value of the property after the lease extension
• The terms of the lease
• Any marriage value that may be applicable

In addition to the valuation we can negotiate the premium on your behalf, at an hourly rate.

We have surveyors in Leicestershire covering; Leicester, Loughborough, Hinckley, Wigston, Melton Mowbray, Market Harborough, Oadby and Wigston, Coalville, Ashby-de-la-Zouch and Shepshed.

For more details, please contact us.