The market value of Glossop leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is less than eighty years
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent 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 many years ahead.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| 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. |
| 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. |
The conveyancers that we work with procure Glossop 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.
In 2014 Jude, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Glossop. In buying his home two decades ago, the length of the lease was of minimal bearing. Thankfully, he recognised he needed to take steps soon on a lease extension. Jude was able to extend his lease just under the wire in September. Jude and the landlord subsequently settled on an amount of £6,000 . If the lease had gone below eighty years, the premium would have become more exhorbitant by a minimum £1,050.
Last Summer we were contacted by Mr and Mrs. I David , who purchased a basement apartment in Glossop in July 1998. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Identical premises in Glossop with 100 year plus lease were in the region of £265,000. The mid-range ground rent payable was £50 billed per annum. The lease terminated in 2100. Given that there were 74 years left we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.
In 2014 we were phoned by Dr Benjamin Patel who, having purchased a basement apartment in Glossop in August 2011. The question was if we could estimate the premium would likely be to extend the lease by an additional years. Identical residencies in Glossop with a long lease were in the region of £166,400. The mid-range amount of ground rent was £60 billed quarterly. The lease end date was in 2080. Given that there were 54 years as a residual term we calculated the premium to the landlord to extend the lease to be between £32,300 and £37,400 not including expenses.