The market value of Wareham 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 substantially once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
Regardless of whether you are a tenant or a freeholder in Wareham,the lease extension solicitors 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 Wareham valuers.
Tommy was the the leasehold proprietor of a conversion flat in Wareham on the market with a lease of a little over 72 years outstanding. Tommy on an informal basis spoke with his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Tommy to exercise his statutory right. Tommy procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last Christmas we were phoned by Mr and Mrs. E Moreau , who was assigned a lease of a first floor apartment in Wareham in February 2012. The question was if we could estimate the price could be for a 90 year lease extension. Similar homes in Wareham with 100 year plus lease were valued about £267,600. The mid-range ground rent payable was £65 invoiced annually. The lease concluded in 2092. Given that there were 67 years unexpired we approximated the compensation to the freeholder to extend the lease to be between £14,300 and £16,400 plus costs.
In 2009 we were called by Mr Dylan Gray who, having was assigned a lease of a garden apartment in Wareham in March 1995. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year lease extension. Similar flats in Wareham with an extended lease were valued around £206,200. The mid-range amount of ground rent was £55 billed yearly. The lease ended on 3 January 2081. Considering the 56 years unexpired we estimated the compensation to the landlord for the lease extension to be within £31,400 and £36,200 not including legals.