The market value of Malpas leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is below than eighty years
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Malpas,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Malpas valuers.
Off the back of unsuccessful discussions with the landlord of her leasehold flat in Malpas, Gemma commenced the lease extension process just as her lease was approaching the all-important 80-year deadline. The transaction completed in April 2015. The landlord’s fees were kept to an absolute minimum.
Last Autumn we were phoned by Mr B Rodríguez , who was assigned a lease of a purpose-built flat in Malpas in April 1999. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical homes in Malpas with 100 year plus lease were worth £200,800. The average ground rent payable was £65 invoiced yearly. The lease end date was on 22 May 2085. Considering the 60 years remaining we calculated the compensation to the landlord to extend the lease to be within £20,900 and £24,200 not including costs.
Mr and Mrs. V Martin purchased a garden apartment in Malpas in November 2012. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Malpas with a long lease were in the region of £255,000. The average amount of ground rent was £50 invoiced quarterly. The lease expired on 18 February 2096. Given that there were 71 years left we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.