Cowley 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 generally accepted that a property with over one hundred years unexpired lease term is worth roughly 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 decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Cowley,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cowley valuers.
In recent months Elijah, started to get near to the eighty-year threshold with the lease on his basement apartment in Cowley. Having bought his flat two decades ago, the lease term was of little importance. As luck would have it, he realised he needed to take steps soon on a lease extension. Elijah arranged for a lease extension just under the wire last April. Elijah and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If the lease had gone lower than 80 years, the sum would have increased by a minimum £1,050.
Last Autumn we were called by Dr C Moore , who purchased a first floor flat in Cowley in November 1996. The question was if we could estimate the premium would likely be for a ninety year lease extension. Identical homes in Cowley with an extended lease were valued about £300,000. The average amount of ground rent was £50 collected annually. The lease expired on 17 September 2101. Taking into account 76 years unexpired we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus legals.
An example of a Freehold Enfranchisement case for a Cowley residence is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case affected 2 flats. The number of years remaining on the existing lease(s) was 69 years.