The market value of Highnam leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate significantly once the remaining term is less than 80 years
Leasehold properties in Highnam with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you increased control over the value of your Highnam leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year George, started to get near to the eighty-year threshold with the lease on his ground floor flat in Highnam. In buying his flat two decades ago, the unexpired term was of little bearing. Fortunately, it dawned on him that he needed to take action soon on Extending the lease. George arranged for a lease extension just under the wire last April. George and the landlord who owned the flat above ultimately settled on an amount of £6,000 . If the lease had dipped below 80 years, the figure would have escalated by at least £925.
In 2010 we were phoned by Mr Y Mercier who, having was assigned a lease of a studio apartment in Highnam in August 2011. The dilemma was if we could shed any light on how much (roughly) price could be to extend the lease by a further 90 years. Comparative properties in Highnam with 100 year plus lease were valued around £223,400. The average ground rent payable was £60 billed quarterly. The lease ended on 7 June 2084. Taking into account 59 years remaining we estimated the premium to the landlord for the lease extension to be within £27,600 and £31,800 plus expenses.
In 2012 we were e-mailed by Dr F Rodríguez who, having owned a ground floor apartment in Highnam in October 2001. We are asked if we could estimate the price could be for a 90 year extension to my lease. Similar residencies in Highnam with a long lease were worth £205,000. The mid-range ground rent payable was £50 invoiced per annum. The lease came to a finish on 9 September 2104. Given that there were 79 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus expenses.