Propertymark and Leasehold Valuers launch free leasehold extension calculator
23rd July 2018 | 12:00am
23rd July 2018 | 12:00am
Named the Leasehold Estate Agent Portal ('leap'), the platform provides estate agents with an online ‘go to’ facility to help estimate the potential premium of a lease extension on behalf of their clients with ‘short’ lease flats.
Louie Burns, Managing Partner of Leasehold Valuers, said: "In the complex world of leasehold valuation, trying to establish the likely cost of a lease extension can be extremely difficult.
"leap is the only online lease extension calculator developed for use by estate agents and is unique as it is the only platform of its kind capable of calculating the likely cost of a lease extension by specific geographic region.
"We have conducted comprehensive analysis of recent market data, property tribunal decisions and a myriad of other sources and believe leap to be the most accurate lease extension calculator available to estate agents."
Leasehold flat owners have a statutory right to extend the length of their lease but must pay compensation to the flat’s freeholder in order to add an additional 90 years to the term of their lease and reduce their ground rent to a peppercorn.
The premium flat owners must pay to the freeholder to extend their lease is determined by valuers using a set of complex calculations, which include estimations of the value of the flat both before and after the lease has been extended. A flat with a longer lease is generally worth more than the same flat held on a shorter lease.
Burns continued: "Existing methods for calculating the cost of a lease extension favour the interests of freeholders, at the expense of leaseholders, because they are often influenced by data from the Prime Central London market, where property prices are among the highest in the UK.
"Consequently, existing calculation methods can mean that leasehold flat owners outside central London pay a higher premium for their lease extension. The introduction of leap marks the first time valuers have attempted to fairly represent the cost of lease extensions for flats outside the Prime Central London market.
"We believe leap represents the fairest, least subjective and most accurate way to estimate the cost of a lease extension for the majority of leasehold flat owners across the country, because it ensures data from the Prime Central London market does not inflate lease extension premiums outside the capital."
NAEA Propertymark Chief Executive, Mark Hayward said: "We are so pleased to have partnered with Leasehold Valuers in the creation of this calculator. It is an invaluable tool that will enable our members to give proper and correct advice to the consumer in a form that is easy to understand."