ELMBIRCH PROPERTIES PLC  UKUT 0314 (LC) re. 51 Humphrey Middlemore Drive
We start with bare facts:
“12. The long lease of No. 51 was granted on 20 June 1986 and is for a term of 99 years from 24 June 1985. The initial annual rent was £45, subject to a fixed increase on 24 June 2016 to £90, and a further increase on 24 June 2049 to £180. On 9 November 2015 the tenants … gave the appellant notice under section 42 of the 1993 Act claiming a new lease…“
We need to organise this data for the ground rent capitalisation calculations:- Continue reading “Lease Extension Formula Part 2”
I’ll return later to the valuation caper. First I will work through an example of the formula using the case of ELMBIRCH PROPERTIES PLC  UKUT 0314 (LC), as this was decided by the UT on 27 July 2017, well after the Mundy case.
The appeal involved two extension premiums. I will use just one, the calculation for 51 Humphrey Middlemore Drive, leaving you free to practice on the other. The Upper Tribunal’s maths are found on pages 20 and 21 of their decision. Continue reading “Lease Extension Formula Part 1”
The tortuous extension route is set out in Chapter II, Part I of the LRHUDA 1993, which confers (on a qualifying tenant of a flat for 2 years) a right to acquire a new lease on payment of a premium determined by a statutory formula. Except the freeholder does not have to counter with a formula based premium offer.
The new lease replaces the existing lease for a term expiring 90 years after the term date of the existing lease and at a peppercorn rent for the whole term (section 56(1) LRHUDA 1993 ). Continue reading “Lease Extension Process”
Any doubt as to the incentive to sustain leasehold over commonhold is perfectly summarised in an innocent Savills Spotlight Research report in May 2012 titled Spotlight Ground Rents Spring 2012 headlined “Ground rents are set to become an attractive investment in a growing market”. Three quotes are of particular note: Continue reading “Ground Rent”