Biggleswade residential property held on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Biggleswade leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Luca, came dangerously close to the eighty-year threshold with the lease on his garden apartment in Biggleswade. In buying his home two decades ago, the length of the lease was of minimal interest. Fortunately, he noticed he needed to take action soon on a lease extension. Luca was able to extend his lease just in the nick of time in April. Luca and the freeholder eventually agreed on the final figure of £5,000 . If he had missed the deadline, the sum would have gone up by at least £950.
In 2011 we were phoned by Dr C Anderson who, having took over the lease of a first floor flat in Biggleswade in March 1998. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Comparative flats in Biggleswade with an extended lease were valued around £270,000. The mid-range amount of ground rent was £55 collected monthly. The lease ran out in 2100. Considering the 75 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
Last Spring we were called by Mr Reuben Parker , who owned a newly refurbished apartment in Biggleswade in June 2003. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by a further 90 years. Similar flats in Biggleswade with a long lease were valued around £173,800. The mid-range ground rent payable was £60 collected annually. The lease expiry date was in 2080. Considering the 55 years unexpired we estimated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including expenses.