The re-sale value of a leasehold property in Langford is impacted by how long the lease has left to run. If it is near to or less than eighty years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be finalised prior to the eighty year cut off point. Current legislation entitles Langford qualifying lessees to an additional term of 90 years in addition to the unexpired term, at a notional rent (zero ground rent). The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be worth the same as 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Langford lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Lewis was the the leasehold owner of a high value apartment in Langford on the market with a lease of a little over 61 years unexpired. Lewis informally contacted his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 annually. No ground rent would be payable on a lease extension were Lewis to exercise his statutory right. Lewis procured expert advice and was able to make a more informed decision and handle with the matter and sell the flat.
In 2013 we were called by Dr Emma Phillips who, having owned a one bedroom flat in Langford in February 2012. We are asked if we could approximate the price would likely be for a 90 year lease extension. Identical residencies in Langford with a long lease were valued about £225,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease finished in 2089. Taking into account 64 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £16,200 and £18,600 plus professional charges.
Last year we were contacted by Dr Jude Ali , who purchased a garden apartment in Langford in July 1997. The question was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable homes in Langford with 100 year plus lease were in the region of £270,000. The average ground rent payable was £55 invoiced quarterly. The lease lapsed on 21 August 2100. Considering the 75 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus expenses.