Factors Affecting Lease Extension Valuation in UK
If you own a leasehold property in UK and now it is the time to extend that lease, then you should be aware of the factors to be considered while estimating the cost of the lease extension. If you don’t have enough information and need guidance regarding the lease extension process or related aspects, you can reach out to our chartered surveyors. In this blog, we will take you through each factor that plays a vital role in lease extension valuation in UK –
Length of the Lease: Duration of the lease not only affects the property’s value, but it also affects the cost to be incurred in extending the lease. If the lease is not extended before its length falls below 80 years, the leaseholder needs to pay a higher amount for the lease extension. In addition, lenders tend not to want to lend mortgages on such properties.
Current Market Value of your Property: This can either be the current market value of your property with the current short lease or the value with a longer lease (ie after the extension has been completed).
Location of property: wherein the UK your property is located does have a bearing on the calculation. This is because property values in different parts of the UK grow at different rates and this is reflected in the Deferment rate applied in your calculation.
Ground Rent Payable: the ground rent you pay throughout the term of the lease is important as the landlord must be compensated for losing this income stream once you have extended your lease (as your ground rent will decrease to Zero)
At Leasehold Valuations, we deliver the services that you can rely on. So, contact our chartered surveyors today to see how much it will cost to extend your lease.