Deciphering Marriage Value in London's Real Estate Landscape

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Farnaz Fazaipour and Justin Bennett discussed the concept of marriage value in the context of leasehold reform. Justin Bennett explained the formula used in leasehold reform and how the relativity of shorter leases compared to freehold has fallen, leading to higher amounts of marriage value. They also discussed the potential implications of the Leasehold and Freehold Reform Bill, including the impact on valuations and the potential increase in lease extension costs if marriage value is included.

Outline

Marriage value in leasehold enfranchisement.

• Marriage value is the difference between what both parties gain after a transaction, compared to what they had before.
• The formula for calculating marriage value is simple, but the disputes arise over the level of premium.
• Justin Bennett explains the two parts of premium: landlord's loss (diminution in value) and marriage value (profit for both parties)
• Discussion of how discount rates and obsolescence affect valuation in different areas of the UK

Leasehold and freehold reform, impact on valuations uncertain.

• Justin Bennett explains the proposed changes to marriage value and total abolition, benefiting existing lease holders but not others.
• The impact of these changes on valuations is uncertain, with the bill growing in length and complexity.
• Justin Bennett discusses the Leasehold and Freehold Bill, mentioning amendments and valuation implications.
• Farnaz Fazaipour thanks Justin Bennett and encourages listeners to reach out for questions on the bill.

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