Delighted to have negotiated an additional element of premium for a landlord client to reflect added potential for redevelopment of a flat where the lessee sought an extended 90 year lease.
The lessee had separately obtained a valuable planning consent prior to serving notice that permitted him to not only extend the flat by an approx. additional 21% in internal space but also at the same time completely rearrange the accommodation. The result would not only create an additional (and new master) bedroom with en-suite bathroom but would also rearrange the layout into a far more practical and sensible space.
As the planning permission was in place as at the valuation date, a hypothetical purchaser would have paid more for the benefit of the consent which in turn flowed through to the landlord on reversion of the lease over 91 years away.
Despite the added increase in value net of development costs was considerably discounted to reflect the long distant reversion, the end result nevertheless produced an additional approx. 25% increase over the underlying in repair settled freehold rate for the existing flat.
The lessee will still need landlord’s consent to carry out the works for additional premium.