The value of Somersham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the remaining term is below than 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Using our service will provide you better control over the value of your Somersham leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the landlord of her first floor apartment in Somersham, Rebecca initiated the lease extension process as the 80 year mark was quickly approaching. The lease extension was concluded in January 2010. The landlord’s charges were restricted to less than 600 pounds.
In 2013 we were contacted by Mrs Georgia Cooper who, having bought a garden flat in Somersham in March 2001. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Comparable homes in Somersham with 100 year plus lease were worth £250,400. The mid-range amount of ground rent was £65 collected every twelve months. The lease expired on 18 March 2090. Given that there were 64 years outstanding we estimated the premium to the freeholder to extend the lease to be between £19,000 and £22,000 not including legals.
In 2010 we were phoned by Dr Samantha Hernández who, having was assigned a lease of a purpose-built apartment in Somersham in March 2006. The dilemma was if we could approximate the price would be for a 90 year lease extension. Identical premises in Somersham with a long lease were worth £189,000. The mid-range ground rent payable was £55 invoiced annually. The lease came to a finish on 18 October 2079. Considering the 53 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £28,500 and £33,000 not including fees.