The value of Greenfield leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate substantially once the remaining term is below than eighty years
Leasehold residencies in Greenfield with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| 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; |
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Greenfield,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Greenfield valuers.
Luca was the the leasehold proprietor of a conversion flat in Greenfield on the market with a lease of fraction over 59 years left. Luca informally spoke with his landlord a well known local-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Luca to exercise his statutory right. Luca obtained expert advice and secured satisfactory deal without going to tribunal and sell the property.
In 2013 we were approached by Ms V Flores who, having owned a one bedroom flat in Greenfield in September 2007. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable properties in Greenfield with 100 year plus lease were worth £203,200. The average ground rent payable was £65 invoiced annually. The lease expired in 2087. Having 61 years remaining we calculated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of expenses.
Last Christmas we were approach by Ms Sophia Anderson , who acquired a ground floor flat in Greenfield in March 1998. The dilemma was if we could approximate the price would likely be to extend the lease by ninety years. Comparative premises in Greenfield with an extended lease were worth £260,000. The average amount of ground rent was £50 invoiced per annum. The lease expiry date was on 22 March 2098. Considering the 72 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.