I have a query re: valuations for remortgaging and the relevance of lease length on a valuation.
We have a 2 bed flat that we want to remortgage (to buy to let). It has a 69 year lease - which we ideally want to extend in the next year or so. We had the property valued by an estate agent 4 months ago at £170k. He said a buyer would negotiate down based on the short lease.
The valuation done by the surveyor for the mortgage last week was £160k - crucially for us, coming in at less than we need for the lender to offer us the 75% loan we really need. (means we have to come up with money to make up the shortfall as well as extend the lease).
We thought the valuation was lower because it took into consideration our short lease. But our broker queried it and apparently it has no bearing until it reaches a 'critical ' level of about 50 years. Is this really the case? My understanding is that some lenders won't lend on properties with a lease less than 65 yrs - which we are fast approaching. So how can the length of lease have no affect on the valuation ??
(I have an issue with how the surveyor arrived at the £160k figure, apparently comparing with the sold prices of similar properties in the last 6 months as I am struggling to find suitable properties for comparison..... But there's probably nothing we can do about his valuation....)
Any thoughts welcome. Thanks.
We have a 2 bed flat that we want to remortgage (to buy to let). It has a 69 year lease - which we ideally want to extend in the next year or so. We had the property valued by an estate agent 4 months ago at £170k. He said a buyer would negotiate down based on the short lease.
The valuation done by the surveyor for the mortgage last week was £160k - crucially for us, coming in at less than we need for the lender to offer us the 75% loan we really need. (means we have to come up with money to make up the shortfall as well as extend the lease).
We thought the valuation was lower because it took into consideration our short lease. But our broker queried it and apparently it has no bearing until it reaches a 'critical ' level of about 50 years. Is this really the case? My understanding is that some lenders won't lend on properties with a lease less than 65 yrs - which we are fast approaching. So how can the length of lease have no affect on the valuation ??
(I have an issue with how the surveyor arrived at the £160k figure, apparently comparing with the sold prices of similar properties in the last 6 months as I am struggling to find suitable properties for comparison..... But there's probably nothing we can do about his valuation....)
Any thoughts welcome. Thanks.