The value of Yate 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 unexpired lease term is below than 80 years
It is conventional wisdom that a property with over one hundred years remaining is worth roughly the equivalent 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 ahead.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Yate leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kai owned a studio apartment in Yate being sold with a lease of a few days over 72 years left. Kai on an informal basis approached his landlord a well known London-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Kai to invoke his statutory right. Kai obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were e-mailed by Mrs Bethan Morgan who, having owned a purpose-built apartment in Yate in June 2003. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Comparative premises in Yate with 100 year plus lease were worth £200,000. The average ground rent payable was £50 invoiced every twelve months. The lease elapsed on 22 April 2104. Having 78 years outstanding we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.
Last year we were called by Mr Jasper Peterson , who moved into a ground floor flat in Yate in October 2005. We are asked if we could shed any light on how much (approximately) price would be for a ninety year lease extension. Comparable homes in Yate with 100 year plus lease were valued around £267,600. The mid-range ground rent payable was £65 collected every twelve months. The lease lapsed on 6 May 2093. Given that there were 67 years remaining we approximated the compensation to the landlord for the lease extension to be between £14,300 and £16,400 plus legals.