Totterdown leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Totterdown tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Totterdown you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
Engaging our service will provide you better control over the value of your Totterdown leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Harvey, came dangerously near to the eighty-year mark with the lease on his leasehold flat in Totterdown. In buying his home two decades ago, the lease term was of no relevance. Thankfully, he became aware that he would soon be paying way over the odds for a lease extension. Harvey was able to extend his lease just ahead of time last March. Harvey and the landlord in the end settled on the final figure of £6,000 . If the lease had gone to less than 80 years, the figure would have escalated by at least £1,100.
Mr and Mrs. H Dupont took over the lease of a one bedroom flat in Totterdown in May 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar residencies in Totterdown with an extended lease were in the region of £280,000. The average ground rent payable was £55 invoiced every twelve months. The lease lapsed on 7 July 2103. Taking into account 77 years left we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including costs.
Last Autumn we were called by Mrs C Ward , who owned a ground floor flat in Totterdown in January 1996. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Identical premises in Totterdown with 100 year plus lease were in the region of £183,600. The mid-range amount of ground rent was £65 collected per annum. The lease ended on 26 February 2083. Given that there were 57 years unexpired we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 plus legals.