The market value of Arlesey 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 escalate significantly once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | 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 |
Irrespective of whether you are a tenant or a freeholder in Arlesey,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Arlesey valuers.
Jude was the the leasehold owner of a conversion apartment in Arlesey being sold with a lease of a little over sixty years unexpired. Jude informally spoke with his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Jude to invoke his statutory right. Jude obtained expert advice and secured an acceptable resolution informally and readily saleable.
Mr and Mrs. C Miller purchased a ground floor apartment in Arlesey in May 1998. We are asked if we could estimate the premium would be to extend the lease by 90 years. Similar homes in Arlesey with a long lease were in the region of £215,600. The mid-range ground rent payable was £45 collected annually. The lease elapsed on 24 September 2088. Taking into account 62 years remaining we calculated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 plus fees.
Last Spring we were called by Dr Ethan Lambert , who purchased a basement apartment in Arlesey in September 2008. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Similar flats in Arlesey with a long lease were in the region of £265,000. The mid-range amount of ground rent was £50 billed quarterly. The lease concluded on 23 November 2099. Given that there were 73 years left we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 plus expenses.