The market value of Rush Green 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 increase significantly once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you better control over the value of your Rush Green leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Adam, came critically close to the 80-year mark with the lease on his ground floor flat in Rush Green. In buying his home two decades ago, the unexpired term was of minimal interest. Thankfully, it dawned on him that he would soon be paying an inflated amount for a lease extension. Adam was able to extend his lease at the eleventh hour last May. Adam and the landlord ultimately settled on an amount of £5,000 . If the lease had fallen to less than 80 years, the sum would have gone up by at least £1,050.
Dr H Hernández acquired a studio flat in Rush Green in February 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparative residencies in Rush Green with a long lease were worth £210,000. The average ground rent payable was £50 billed per annum. The lease concluded on 26 July 2106. Given that there were 80 years outstanding we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension decision for a Rush Green flat is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case related to 1 flat. The unexpired term as at the valuation date was 57.5 years.