Lease Extension & Enfranchisement – Inspection vs Desktop Options
Tuesday, 23rd June 2020
Leasehold Valuations | Valuation
It has been 100 days since Boris Johnson announced in a televised address, that the UK was to go into lockdown. At the time, Peter Barry Surveyors were quick to act and implement working practices that protected our clients and our staff with the wider scope for desktop studies for lease extensions and freehold acquisitions being a perfect example.
With the reopening of non-essential businesses and with the hospitality sectors following on 4th July, now is an appropriate time to revisit the concept of remote instructions and see where they best fit.
HOW IS A DESKTOP STUDY BE POSSIBLE?
We have been offering this service to clients many years prior to COVID and is made possible by the requirements of the Leasehold Reform Act and that the property is valued in a lease-maintained condition. This hypothetical state means that the real-world condition of the flat, is not taken into account.
What your surveyor will need, is an accurate floorplan and this is most often obtained from sales particulars or the lease although not all leases have floorplans that are of suitable quality.
Lower down the pecking order you have EPCs, which are often very accurate on basic layouts but less so on complex ones over more than one floor. Owners can provide measurements or have a go at drawing their own floorplan but now we are moving out of lockdown, this is now less favourable.
Time and cost savings along with the avoidance of social contact make the desktop study a very popular option, but the decision on whether to inspect should be carefully considered.
WHEN AN INSPECTION IS NEEDED
Desktop studies lend themselves well to lease extensions above 80 years (where marriage value is not paid) and those in the 60s and 70s. There is a greater need for an inspection with shorter leases and the resulting higher premium, but the location is also a factor.
Prime Central London (PCL) properties are valued in £ /sq ft and coupled with their high value, should be inspected to ensure accuracy. Outside of PCL, the market simply doesn’t work on that basis, so there is more of a margin for error.
AND FREEHOLD ENFRANCHISEMENTS?
We would typically only advocate a desktop study for enfranchisement where all properties in the building are on leases greater than 80 years and where there is no Development Value (DV). Development Value needs to be considered to parts of the building where there could be an extension to an existing flat or a new self-contained dwelling be created.
In the majority of cases, this will be in the loft space with the surveyor factoring in feasibility and the intent of the build. As this as the potential to add tens of thousands of pounds to the overall premium, an inspection would be a necessity.
Our team at Peter Barry can offer you clear and impartial advice to enable you to make the choice desktop and inspection. Please call us on 020 8360 7615 or email surveying@peterbarry.co.uk
