Great Baddow leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Great Baddow tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Great Baddow you would be well advised to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the property 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Great Baddow leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following unsuccessful discussions with the freeholder of her leasehold apartment in Great Baddow, Catherine commenced the lease extension process as the eighty year mark was quickly approaching. The lease extension completed in September 2013. The landlord’s fees were kept to an absolute minimum.
In 2011 we were contacted by Dr A Martin who, having was assigned a lease of a one bedroom apartment in Great Baddow in August 2010. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar properties in Great Baddow with 100 year plus lease were worth £183,600. The average amount of ground rent was £65 collected yearly. The lease elapsed on 24 October 2082. Given that there were 57 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 plus professional charges.
Last September we were e-mailed by Dr L Díaz , who acquired a one bedroom flat in Great Baddow in February 2012. We are asked if we could approximate the price would likely be for a ninety year lease extension. Similar residencies in Great Baddow with 100 year plus lease were valued about £245,000. The average ground rent payable was £50 billed annually. The lease expiry date was in 2093. Taking into account 68 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including expenses.