The market value of Consett leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than eighty years
Leasehold residencies in Consett with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
Retaining our service gives you increased control over the value of your Consett leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Dexter was the the leasehold proprietor of a studio flat in Consett being marketed with a lease of just over 72 years remaining. Dexter on an informal basis spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Dexter to invoke his statutory right. Dexter procured expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last Summer we were contacted by Mr B Alexander , who bought a one bedroom flat in Consett in June 2008. The dilemma was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Similar premises in Consett with an extended lease were worth £300,000. The average amount of ground rent was £50 billed quarterly. The lease lapsed on 20 January 2102. Given that there were 76 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of expenses.
In 2014 we were e-mailed by Mr and Mrs. D Torres who, having was assigned a lease of a ground floor flat in Consett in February 1996. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparative properties in Consett with an extended lease were in the region of £257,800. The average amount of ground rent was £65 billed yearly. The lease ended in 2091. Given that there were 65 years remaining we calculated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of professional charges.