Lease Extension Valuation
If you are considering whether to extend a lease or not you should talk with lease extension valuation surveyor who will help you to understand the intricacies of leasehold valuation for lease extension purposes and guide you through the complex process.
When you own the leasehold property it will always be on the fixed term. When this term expires your leasehold interest will diminish and the flat will revert back to the freehold.
The current legislation called Leasehold Reform, Housing and Urban Development Act 1993 allows to extend the lease for an additional 90 years on top of the existing term with peppercorn ground rents, providing you meet the eligibility criteria and obtain lease extension valuation.
You may wish to consider extending your lease for the following reasons:
- Your lease is below 80 years and you want to extend the lease before property loses more of its value.
- Your lease is above 80 years and you wish to extend the lease before it runs below 80 years and makes your premium significantly more expensive.
- You are selling the property and wish to assign the right to extend the lease to your buyer.
- You have difficulties obtaining mortgage/remortgage due to a short lease.
- You want to extend the lease to remove any future ground rents.
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Why Should You Instruct Lease Extension Surveyor?
You might have seen lease extension calculator online which is good for providing an indicative premium for lease extension but it should not be relied on for serving statutory notices as it does not consider rising ground rents which form a significant portion of the lease extension premium.
The most reliable way to ensure that the correct lease extension premium is paid is to instruct a specialist lease extension valuation surveyor. The surveyor will inspect your property and prepare a detailed lease extension valuation report which will include the premium payable and the likely range that lease extension will be settled at. In order to arrive at the lease extension premium, the surveyor will consider the three most important variables in the lease extension valuation:
The ground rent can significantly add to the lease extension premium. The leases contain various ground rent provisions, and these can be fixed, rising doubling or even tied to Retail Price Index (RPI). The lease extension surveyor can help you understand the ground rent nuances and explain the implications of having interval increasing ground rents.
The length of the lease has a direct effect on lease extension valuation. The longer the lease the cheaper lease extension will be. The lease extension surveyor based on the lease term remaining will calculate reversionary interest which forms part of the total lease extension premium.
Marriage value is a formula which forms part of the lease extension valuation. When the lease falls below 80 years the landlord is entitled to a 50% increase from a short and a long lease value when the lease is extended. The lease extension surveyor will calculate the short lease value of the property to determine the marriage value compensation payable to the landlord.
Leasehold Valuation Experts
We Can Help You With
Lease Extension Valuation
We can determine whether you are eligible and provide the full lease extension valuation report. We understand that the lease extension process sometimes can be like a roller coaster, therefore our comprehensive valuation service covers all potential outcomes.
Lease Extension Solicitors Advice
We can help you understand a complex terminology and brief you on the lease extension process. We work and partner with the best specialist lease extension solicitors that can deal with the conveyancing of the new lease without a hitch and serve required notices for statutory proceedings quickly.
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CASE STUDY 1
71 years remaining, with ground rents.
We were instructed to provide a lease extension valuation for landlord’s counter-notice to respond to tenant’s Section 42 notice which was served at £23,000. We have analysed the local market and felt that it is undervalued. We have valued the premium at £40,000 for Section 45 notice and subsequently acted in negotiations to achieve a final premium figure of £36,000 for our client. Our client was extremely happy with the final settlement we have achieved.
CASE STUDY 2
84 years remaining, no ground rents.
We were instructed by the leaseholder to provide a lease extension valuation for the purpose of serving statutory Section 42 notice. We have valued the lease extension premium at £6,100. The landlord served Section 45 counter-notice at £7,500. We made contact with the landlord’s surveyor to understand the variables used to determine the premium which was higher significantly compared with local market evidence. We have negotiated and reached a final premium settlement at £6,100.
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