The market value of Aldeburgh 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 materialy once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Halifax | Minimum 70 years from the date 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. |
Regardless of whether you are a tenant or a landlord in Aldeburgh,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Aldeburgh valuers.
In 2014 Andrew, came precariously close to the eighty-year threshold with the lease on his basement flat in Aldeburgh. Having purchased his property 19 years ago, the length of the lease was of no importance. Fortunately, he recognised he would imminently be paying way over the odds for a lease extension. Andrew extended the lease just under the wire in August. Andrew and the freeholder via the management company subsequently agreed on a premium of £6,000 . If the lease had gone lower than 80 years, the figure would have escalated by a minimum £925.
Dr Chantelle Bell was assigned a lease of a garden apartment in Aldeburgh in November 1997. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Aldeburgh with an extended lease were worth £275,000. The average ground rent payable was £45 collected yearly. The lease terminated on 11 November 2095. Taking into account 69 years left we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.
Mr and Mrs. U Sánchez purchased a one bedroom apartment in Aldeburgh in August 2006. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Comparative properties in Aldeburgh with a long lease were worth £216,000. The mid-range ground rent payable was £60 billed annually. The lease expired in 2084. Considering the 58 years remaining we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of professional charges.