For those whose Holywell property is held on a long lease, the message is clear – if you do nothing, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Using our service gives you better control over the value of your Holywell leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jamie owned a conversion flat in Holywell being sold with a lease of a little over sixty years left. Jamie informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jamie to exercise his statutory right. Jamie procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
Dr V Moreau took over the lease of a recently refurbished flat in Holywell in April 2011. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Identical flats in Holywell with 100 year plus lease were in the region of £275,000. The average ground rent payable was £45 invoiced annually. The lease elapsed on 5 July 2094. Considering the 69 years left we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including legals.
Mr and Mrs. I Clarke owned a ground floor flat in Holywell in May 2005. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by a further 90 years. Comparative flats in Holywell with a long lease were worth £216,000. The mid-range amount of ground rent was £60 billed yearly. The lease finished on 25 March 2083. Taking into account 58 years left we calculated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 not including expenses.