The value of Redland leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the unexpired lease term is below than 80 years
Leasehold premises in Redland with over one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Redland can be a difficult process. We recommend you get professional help from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Redland lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
John owned a studio apartment in Redland on the market with a lease of just over 61 years left. John on an informal basis contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 yearly. Ordinarily, ground rent would not be payable on a lease extension were John to invoke his statutory right. John procured expert legal guidance and secured an acceptable resolution without going to tribunal and readily saleable.
Last month we were approach by Dr Ibrahim Taylor , who bought a ground floor flat in Redland in October 2000. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Identical properties in Redland with 100 year plus lease were valued around £200,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease ran out on 4 January 2085. Taking into account 60 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 plus expenses.
Mrs Samantha Gray purchased a purpose-built flat in Redland in June 2004. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar properties in Redland with 100 year plus lease were worth £255,000. The mid-range amount of ground rent was £50 billed monthly. The lease termination date was on 13 April 2096. Considering the 71 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.