Banstead residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
Leasehold properties in Banstead with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Banstead,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Banstead valuers.
After lengthy negotiations with the landlord of her first floor apartment in Banstead, Daisy commenced the lease extension process just as the lease was approaching the all-important 80-year threshold. The transaction completed in May 2011. The landlord’s fees were kept to an absolute minimum.
Last Spring we were called by Dr Elizabeth Davis , who completed a recently refurbished flat in Banstead in March 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Similar properties in Banstead with a long lease were worth £183,600. The average ground rent payable was £65 collected yearly. The lease elapsed on 22 March 2083. Given that there were 57 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 not including legals.
An example of a Lease Extension decision for a Banstead residence is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case affected 1 flat. The unexpired term as at the valuation date was 60.43 years.