Preston residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Preston,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Preston valuers.
In the wake of 6 months of lengthy correspondence with the landlord of her studio flat in Preston, Stephanie commenced the lease extension process as the 80 year mark was fast coming. The transaction was concluded in March 2007. The landlord’s costs were kept to an absolute minimum.
In 2009 we were e-mailed by Mr and Mrs. K Gómez who, having completed a ground floor flat in Preston in July 2012. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Identical premises in Preston with an extended lease were valued about £166,400. The average amount of ground rent was £60 collected quarterly. The lease terminated on 22 August 2079. Given that there were 54 years outstanding we approximated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 plus fees.
An example of a Lease Extension case for a Preston property is Ground Floor Flat 79 London Road in September 2012. the Tribunal held that the premium payable for the lease extension should be £7,636 This case related to 1 flat. The unexpired term was 74 years.