For those whose Rush Green flat is held on a long lease, our message is clear – if no remedial action is taken, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension.
It is generally accepted that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Rush Green,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Rush Green valuers.
Half a year ago Muhammad, came critically close to the 80-year threshold with the lease on his first floor apartment in Rush Green. Having purchased his home two decades ago, the unexpired term was of minimal concern. Luckily, he realised he would imminently be paying an escalated premium for Extending the lease. Muhammad was able to extend his lease just in the nick of time in May. Muhammad and the freeholder ultimately settled on the final figure of £6,000 . If the lease had dropped to less than 80 years, the premium would have escalated by at least £1,050.
Last Spring we were e-mailed by Dr Danielle Smith , who moved into a ground floor flat in Rush Green in March 1996. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by a further 90 years. Comparative homes in Rush Green with 100 year plus lease were in the region of £174,200. The average ground rent payable was £55 collected yearly. The lease termination date was on 11 September 2075. Taking into account 51 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 exclusive of costs.
An example of a Lease Extension matter before the tribunal 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 was in relation to 1 flat. The unexpired term as at the valuation date was 57.5 years.