For anyone whose Eaton Bray property is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a freeholder in Eaton Bray,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Eaton Bray valuers.
During the course of the last few months Connor, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Eaton Bray. Having purchased his flat 19 years ago, the lease term was of minimal bearing. Luckily, he noticed he would soon be paying an inflated amount for a lease extension. Connor arranged for a lease extension just in the nick of time in August. Connor and the landlord who owned the flat above subsequently agreed on an amount of £6,000 . If the lease had slid below eighty years, the price would have become more costly by a minimum £975.
Last Christmas we were called by Dr W Ricardo , who took over the lease of a one bedroom flat in Eaton Bray in October 2006. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Identical flats in Eaton Bray with an extended lease were valued about £220,400. The average ground rent payable was £45 billed quarterly. The lease elapsed in 2088. Given that there were 64 years outstanding we calculated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 not including fees.
In 2012 we were contacted by Mrs Melissa Wright who, having was assigned a lease of a studio flat in Eaton Bray in June 1997. The question was if we could shed any light on how much (roughly) premium could be to extend the lease by a further 90 years. Identical premises in Eaton Bray with an extended lease were worth £270,000. The average ground rent payable was £55 invoiced yearly. The lease concluded on 2 June 2099. Having 75 years remaining we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.