For anyone whose Peterborough home is held on a long lease, the message is clear – if you ignore the situation, your property will ultimately revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Peterborough,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Peterborough valuers.
Off the back of unsuccessful correspondence with the freeholder of her basement flat in Peterborough, Kirsty commenced the lease extension process as the eighty year mark was quickly nearing. The transaction was finalised in June 2014. The freeholder’s costs were kept to an absolute minimum.
Last Autumn we were contacted by Mr Ethan Cox , who moved into a first floor flat in Peterborough in June 1997. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Similar homes in Peterborough with 100 year plus lease were worth £235,200. The mid-range ground rent payable was £45 collected monthly. The lease ended in 2091. Given that there were 66 years unexpired we calculated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 plus professional charges.
Last June we were called by Mr and Mrs. D Girard , who was assigned a lease of a basement flat in Peterborough in April 1995. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Peterborough with an extended lease were in the region of £280,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease ended on 28 November 2102. Considering the 77 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 plus fees.