For anyone whose Filton property is held on a long lease, the message is clear – if nothing is done, the property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 will provide you enhanced control over the value of your Filton leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of unsuccessful negotiations with the freeholder of her leasehold apartment in Filton, Emma started the lease extension process as the 80 year threshold was quickly coming. The transaction completed in August 2014. The freeholder’s costs were kept to an absolute minimum.
Mr and Mrs. G Taylor completed a newly refurbished flat in Filton in September 1995. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Identical premises in Filton with an extended lease were worth £275,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease finished in 2102. Given that there were 76 years left we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2012 we were phoned by Mrs Stephanie Rivera who, having acquired a studio apartment in Filton in June 2003. The dilemma was if we could approximate the price could be to prolong the lease by an additional years. Comparable residencies in Filton with a long lease were valued around £176,200. The average amount of ground rent was £65 billed quarterly. The lease lapsed in 2082. Considering the 56 years as a residual term we estimated the premium to the landlord for the lease extension to be between £29,500 and £34,000 plus professional charges.