For anyone whose Clophill property is held on a long lease, the message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more expensive it will be to procure a lease extension.
It is generally considered that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Yorkshire 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. |
Engaging our service gives you enhanced control over the value of your Clophill leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Henry was the the leasehold proprietor of a high value apartment in Clophill on the market with a lease of a few days over 61 years unexpired. Henry on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 yearly. No ground rent would be payable on a lease extension were Henry to invoke his statutory right. Henry obtained expert legal guidance and was able to make an informed decision and handle with the matter and sell the property.
In 2012 we were approached by Mr and Mrs. I Flores who, having moved into a first floor apartment in Clophill in November 2010. The question was if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Similar homes in Clophill with 100 year plus lease were worth £275,000. The average amount of ground rent was £55 collected quarterly. The lease came to a finish in 2103. Taking into account 77 years as a residual term we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus professional charges.
Last month we were contacted by Mr and Mrs. G Wilson , who took over the lease of a purpose-built flat in Clophill in April 2008. The dilemma was if we could estimate the premium would likely be for a 90 year lease extension. Similar residencies in Clophill with a long lease were valued around £183,600. The average amount of ground rent was £65 billed monthly. The lease concluded on 4 September 2083. Having 57 years left we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including professional charges.