The market value of Allendale 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 unexpired lease term is below than 80 years
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the residence 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. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Allendale leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ryan was the the leasehold proprietor of a high value flat in Allendale being sold with a lease of fraction over 59 years outstanding. Ryan on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 yearly. No ground rent would be due on a lease extension were Ryan to invoke his statutory right. Ryan procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
In 2014 we were contacted by Mr and Mrs. J Morel who, having completed a recently refurbished flat in Allendale in September 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in Allendale with 100 year plus lease were worth £205,000. The mid-range ground rent payable was £50 invoiced annually. The lease elapsed on 22 August 2104. Having 78 years remaining we approximated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 not including legals.
Mr and Mrs. T Carter bought a purpose-built flat in Allendale in June 1995. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by an additional years. Comparable residencies in Allendale with a long lease were valued around £267,600. The average ground rent payable was £65 collected every twelve months. The lease concluded on 10 July 2093. Given that there were 67 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £14,300 and £16,400 exclusive of professional charges.