Topic 13 - Assessing the Property

Question 1

The value of freehold property could be negatively impacted by what?

Answer 1

The existence of easements and covenants.

Question 2

Freehold flats are seen as problematic to lenders because?

Answer 2

There is no clear responsibility for certain areas in the building.

Question 3

Issues that could affect the value of a leasehold property:

Answer 3

• The lease may contain restrictions that a buyer might find unreasonable.
• The length of the remaining lease term is crucial.
• If it used to be a council flat.

Question 4

Lenders generally insist that leasehold properties have a specified unexpired period of at least…

Answer 4

…30 to 40 years beyond the end of the mortgage term. Some require as much as 60 to 80 or more.

Question 5

Marriage Value -

Answer 5

If a lease has less than 80 years to run, the leaseholder will have to pay a premium and an additional ‘marriage value’ to extend the lease.

Question 6

A new owner must have owned the lease for how long before they have the statutory right to extend it?

Answer 6

Two years.