The market value of Huntingdon 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 increase substantially once the remaining term is less than 80 years
Leasehold properties in Huntingdon with in excess of 100 years unexpired 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 home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Huntingdon,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Huntingdon valuers.
Sebastian was the the leasehold owner of a studio flat in Huntingdon on the market with a lease of a little over 61 years outstanding. Sebastian on an informal basis contacted his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Sebastian to exercise his statutory right. Sebastian procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Dr Stanley Miller took over the lease of a studio flat in Huntingdon in April 2003. We are asked if we could estimate the price would likely be to prolong the lease by a further 90 years. Similar properties in Huntingdon with a long lease were valued about £275,000. The average amount of ground rent was £65 invoiced yearly. The lease finished in 2094. Taking into account 68 years left we approximated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 plus costs.
In 2012 we were approached by Dr L James who, having acquired a first floor flat in Huntingdon in August 1997. The dilemma was if we could estimate the price would be to prolong the lease by an additional years. Similar premises in Huntingdon with a long lease were in the region of £208,600. The mid-range amount of ground rent was £60 billed per annum. The lease ran out on 1 November 2083. Taking into account 57 years remaining we approximated the premium to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of costs.