Why is a lease extension valuation so important?
The first reason you need a valuation is to estimate the “premium” you should pay for your lease extension. Premium is just the technical word for price!
The second reason is that in order to negotiate the best premium for your lease extension, you need to have detailed evidence which can be used to challenge the position taken by your freeholder’s valuer. They usually start by asking for a figure higher than your own.
Because your exact premium will be negotiated with your freeholder (check out Step 2 further down) your valuation should include best and worst estimates. The best is what you’d like to pay, the worst is what your freeholder might want – but your valuer will probably negotiate a premium somewhere in between the two.
What does the estimate take into account?
The valuation for your lease extension will include:
- how much your flat would be worth with a long lease;
- how many years are remaining on your lease;
- what your annual ground rent is
Please Note: If your lease drops below 80 years – even if just by a day – you will have to pay your freeholder an additional fee, which makes the premium much more expensive.
Will the valuer need to visit my flat?
Usually we don’t need to visit a flat to conduct an accurate lease extension valuation.
This is because unlike a valuation completed for the purposes of marketing or mortgaging a property, a lease extension valuation always assumes your flat is in a basic, maintained condition.
In most cases there is plenty of information available about your flat and other nearby properties to complete the valuation on a desktop basis.
The one exception is unique flats, where it is often useful to visit the property in order to understand how your flat’s size and layout compares with other comparable properties.
The benefit of avoiding a site survey is that your valuer can spend more time reviewing the information available. When completing a valuation, we review information from the Land Registry, property portals, auction sites and estate agents.
Our lease extension valuation service
We can conduct valuations nationwide to provide an accurate estimate of how much you will pay for your lease extension premium:
- check you are eligible for a lease extension – if we find that you aren’t, we will refund our fee before we do a valuation
- review the information available about your flat to ensure we can do the valuation on a desktop basis - if we can’t we will conduct an on-site visit for no extra charge!
- provide an estimation of the best and worst case for a lease extension
- detail how we arrived at the figures, in a valuation report
- estimate how much the freeholder might ask for their own legal and valuation costs, which you have to pay
After we’ve provided the report, if you have questions or want to talk through it in detail, we will always be happy to speak on the phone or answer questions via email.
What comes after the valuation in the lease extension process?
The lease extension valuation is the stage 1 in a three-stage process of extending your lease.
The second stage involves negotiating a price for your lease extension – for a statutory lease extension this starts with sending a formal notice to your freeholder.
The third and final stage is to update your lease to add the extra 90 years and reduce your ground rent down to £0. This work will need to be carried out by a solicitor or licenced conveyancer.
Our ‘all in one’ service
We can oversee your lease extension from valuation to completion. It’s our mission to make it as inexpensive and stress-free as possible for you. We will work with the valuers, negotiators and legal professionals to handle every aspect. We will allocate you a case manager, who will look after your case on your behalf.
Our fee for the valuation stage is £725+VAT. For the complete lease extension process (which involves negotiation and conveyancing) the fee is £2,175+VAT .