ABSTRACT
The changes to stamp duty, land registration and accounting standards were made in spite of common arrangements for commercial leasing in the United Kingdom. Lenders tended to favour at least ten years unexpired on lease terms. The traditional lender analysis focussed on a combination of unexpired lease at a guaranteed rent for which a creditworthy tenant was liable plus an assessment of vacant possession value at the end of the term. The letting agent will have some knowledge of the "going rate" for the type of premises he is dealing with. This is usually based on comparable evidence of rental values. The letting agent's problem in establishing and justifying a rental value for a flexible lease are compounded when we consider how that lease is to be valued as an investment. Logically, rent should be set once the lease terms had been agreed.
