Emersons Green residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
It is generally considered that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Emersons Green lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
James was the the leasehold proprietor of a 2 bedroom flat in Emersons Green being marketed with a lease of just over 61 years left. James informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be due on a lease extension were James to exercise his statutory right. James obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Dr Alice Leroy bought a basement apartment in Emersons Green in November 2004. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Identical homes in Emersons Green with a long lease were valued around £205,000. The mid-range amount of ground rent was £50 billed monthly. The lease lapsed in 2104. Considering the 79 years remaining we calculated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus fees.
In 2009 we were contacted by Mrs Charlotte Vincent who, having was assigned a lease of a ground floor flat in Emersons Green in August 2012. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparative premises in Emersons Green with a long lease were worth £275,000. The mid-range ground rent payable was £65 invoiced yearly. The lease ended in 2093. Given that there were 68 years left we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus expenses.