For anyone whose Baguley home is held on a long lease, the message is clear – if you do nothing, the property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Baguley leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of lengthy negotiations with the freeholder of her purpose-built apartment in Baguley, Daisy commenced the lease extension process just as her lease was approaching the all-important eighty-year threshold. The transaction was finalised in September 2011. The landlord’s fees were negotiated to less than 600 GBP.
In 2012 we were phoned by Ms Victoria Gray who, having owned a purpose-built apartment in Baguley in June 2009. The question was if we could approximate the price would be for a ninety year extension to my lease. Identical premises in Baguley with a long lease were valued about £250,400. The average ground rent payable was £65 collected annually. The lease expired in 2088. Considering the 64 years remaining we estimated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 exclusive of costs.
Mrs Y Fournier was assigned a lease of a newly refurbished apartment in Baguley in March 2003. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Baguley with 100 year plus lease were worth £189,000. The average ground rent payable was £55 invoiced every twelve months. The lease terminated in 2077. Given that there were 53 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 not including legals.