Yate leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Yate tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Yate you should see if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years 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. |
Using our service will provide you increased control over the value of your Yate leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Jacob, started to get close to the eighty-year mark with the lease on his two bedroom apartment in Yate. Having bought his flat two decades ago, the length of the lease was of no importance. Thankfully, he became aware that he would imminently be paying an inflated amount for Extending the lease. Jacob arranged for a lease extension just under the wire in January. Jacob and the freeholder via the management company eventually agreed on the final figure of £5,500 . If he not met the deadline, the amount would have increased by at least £1,100.
In 2013 we were phoned by Mr Aiden David who, having completed a one bedroom flat in Yate in May 2010. We are asked if we could estimate the price could be to prolong the lease by 90 years. Identical premises in Yate with a long lease were valued about £201,200. The mid-range ground rent payable was £55 collected every twelve months. The lease finished on 9 May 2081. Considering the 56 years left we estimated the premium to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of professional charges.
Mr and Mrs. P Stewart was assigned a lease of a recently refurbished flat in Yate in February 2001. The dilemma was if we could approximate the premium would likely be for a ninety year lease extension. Comparative flats in Yate with a long lease were worth £300,000. The mid-range ground rent payable was £50 collected per annum. The lease terminated on 10 October 2101. Given that there were 76 years left we estimated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 plus legals.