On the balance of probabilities where you own a flat in Farnham Royal you actually own a long leasehold interest over your property
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 Farnham Royal leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Cameron was the the leasehold proprietor of a studio flat in Farnham Royal on the market with a lease of just over fifty eight years remaining. Cameron informally contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were Cameron to invoke his statutory right. Cameron procured expert legal guidance and was able to make a more informed judgement and deal with the matter and readily saleable.
In 2014 we were e-mailed by Dr J Thomas who, having bought a one bedroom apartment in Farnham Royal in November 2007. The question was if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Comparable premises in Farnham Royal with a long lease were worth £290,000. The average ground rent payable was £60 collected monthly. The lease ended on 13 May 2106. Having 80 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including fees.
Mr and Mrs. R Nelson took over the lease of a ground floor flat in Farnham Royal in June 2007. The question was if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Comparable properties in Farnham Royal with an extended lease were worth £200,800. The average ground rent payable was £65 invoiced yearly. The lease terminated on 28 April 2086. Having 60 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 plus legals.