The re-sale value of a leasehold property in Radcliffe is impacted by how long the lease has remaining. If it is near to or less than 80 years you should expect problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that all matters can be addressed in advance of the 80 year threshold. Leasehold Reform legislation entitles Radcliffe qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| 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 are not acceptable. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 Radcliffe,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Radcliffe valuers.
Finn was the the leasehold owner of a studio flat in Radcliffe on the market with a lease of a little over sixty years remaining. Finn on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Finn to invoke his statutory right. Finn procured expert legal guidance and secured satisfactory deal without going to tribunal and readily saleable.
Last Christmas we were approach by Ms H Taylor , who took over the lease of a one bedroom apartment in Radcliffe in November 2009. We are asked if we could approximate the price would be for a ninety year lease extension. Comparable flats in Radcliffe with a long lease were worth £223,400. The average amount of ground rent was £60 collected every twelve months. The lease concluded on 25 August 2085. Having 59 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 not including professional charges.
In 2013 we were approached by Mrs L Leroy who, having acquired a newly refurbished flat in Radcliffe in January 1997. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparative residencies in Radcliffe with 100 year plus lease were valued around £205,000. The mid-range amount of ground rent was £50 collected monthly. The lease terminated in 2105. Given that there were 79 years as a residual term we approximated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.