What is Relativity leasehold?
The relative value of a property held on an existing long lease compared to its freehold value. In order to work out the marriage value payable during a lease extension or collective enfranchisement it is necessary to consider the value of the remaining years on the lease (its unextended value). …
What are graphs of relativity?
Graphs of Relativity is a new online application. The functionality calculates the unexpired term of any lease, or using an already known unexpired term the application calculates and tabulates the relativity with reference to published graph data.
Has marriage Value been abolished?
Marriage value will be removed from the premium calculation. The calculation rates will be set and an online calculator will be available to make it simpler for leaseholders to find out how much it will cost to buy the freehold or extend the lease.
Who owns the freehold on a leasehold property?
freeholder
You only own a leasehold property for a fixed period of time. You’ll have a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll own the property. Ownership of the property returns to the landlord when the lease comes to an end.
Can ground rent be removed?
Currently a leaseholder can remove an onerous ground rent by exercising a right to a lease extension for an additional 90 years pursuant to the Leasehold Reform Housing and Urban Development Act.
What is peppercorn leasehold?
If you own a lease or even some houses, by way of a long lease or virtual freehold you are probably required to pay something to the landlord. In such cases, the rent (or consideration) is known as a peppercorn rent and will not be demanded by the landlord. Peppercorn rents are common where long leases exist.
Can you have a 999 year lease?
How long can a lease be? Newly-created leases can be anything from 99 or 125 years to 999 years. A 999 year lease is effectively as good as freehold, and there can even be some advantages to owning some properties this way, rather than under freehold (see below).
Should I buy 99-year lease?
The majority of residential leases used to be for a term of 99 years, but more recently leases on modern purpose-built flats have been for 125 years or longer. The simple answer then is yes, there is no problem in principle in buying a flat with a short lease provided that its price reflects this fact.
Is there a market curve for leasehold reform valuations?
The current market curve we have derived therefore marks the maximum relativity for leasehold reform valuations, with adjustment required to take account of the statutory assumption, reducing relativity below this market level. The evidence available to assess the discount required from the real world curve shown in Graph 1 is scarce.
How has relativity changed over the last 20 years?
Relativity is effectively a function of discount rates. The lower the discount rate, the lower relativity becomes. It is clear that we should expect relativity to have changed over the last 20 years, with current relativity being substantially lower than it was in the 1990s.
How many sales of leasehold flats are there?
Our most robust model analyses 5,904 sales of leasehold flats and provides the point estimates of relativity for each lease length shown in Graph 1. The size of the point indicates the number of data points at each lease length. We have then fitted a curve to the point estimates of relativity.
What does the Upper Tribunal’s recent decision mean for relativity?
A recent decision from the Upper Tribunal will result in a modernised approach to calculating relativity For many years, relativity had been assessed with reference to scarce market evidence from unenfranchiseable lease sales and the graphs of relativity produced by various surveyors’ firms.