The market value of Weymouth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the remaining term is below than eighty years
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be equivalent in value to 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 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; |
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
Using our service will provide you increased control over the value of your Weymouth leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted negotiations with the freeholder of her one bedroom apartment in Weymouth, Rhiannon initiated the lease extension process just as the lease was nearing the critical eighty-year deadline. The lease extension was concluded in February 2009. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were e-mailed by Mr Eliot Fournier who, having took over the lease of a one bedroom apartment in Weymouth in August 2007. The dilemma was if we could estimate the price would be for a 90 year lease extension. Identical properties in Weymouth with an extended lease were worth £176,200. The mid-range amount of ground rent was £65 invoiced yearly. The lease came to a finish in 2081. Given that there were 56 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £29,500 and £34,000 plus costs.
Last Autumn we were called by Mr and Mrs. F Gray , who purchased a ground floor apartment in Weymouth in June 2009. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Comparable premises in Weymouth with an extended lease were worth £242,600. The mid-range ground rent payable was £45 invoiced every twelve months. The lease came to a finish in 2092. Having 67 years remaining we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of legals.