The market value of Preston Park leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The lawyers that we work with undertake Preston Park 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 conveyancing solicitor we work with provide it.
During the course of the last few months Aiden, started to get near to the 80-year threshold with the lease on his garden flat in Preston Park. Having purchased his home 19 years previously, the unexpired term was of no importance. As luck would have it, he became aware that he would soon be paying an inflated amount for Extending the lease. Aiden extended the lease just in the nick of time last March. Aiden and the freeholder subsequently settled on an amount of £6,000 . If he had missed the deadline, the amount would have increased by at least £900.
Mr F González acquired a newly refurbished apartment in Preston Park in February 2010. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by ninety years. Comparative premises in Preston Park with an extended lease were worth £166,400. The mid-range ground rent payable was £60 invoiced annually. The lease expiry date was in 2079. Taking into account 54 years outstanding we estimated the premium to the freeholder for the lease extension to be between £32,300 and £37,400 plus professional charges.
In 2012 we were contacted by Mrs Niamh Turner who, having moved into a first floor apartment in Preston Park in May 2001. The dilemma was if we could approximate the premium would likely be to prolong the lease by 90 years. Identical homes in Preston Park with a long lease were in the region of £227,800. The average amount of ground rent was £45 invoiced annually. The lease elapsed in 2090. Having 65 years unexpired we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus professional charges.