The market value of Barlborough leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate materialy once the unexpired lease term is less than eighty years
Leasehold properties in Barlborough with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate 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. |
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you better control over the value of your Barlborough leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Henry owned a conversion flat in Barlborough being sold with a lease of a few days over 72 years outstanding. Henry informally approached his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Henry to exercise his statutory right. Henry procured expert legal guidance and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Mr Aaron Phillips took over the lease of a basement apartment in Barlborough in July 2006. The dilemma was if we could approximate the price would likely be for a ninety year extension to my lease. Similar properties in Barlborough with 100 year plus lease were worth £208,600. The average ground rent payable was £60 billed per annum. The lease expired in 2082. Given that there were 57 years outstanding we approximated the compensation to the landlord to extend the lease to be between £30,400 and £35,200 not including expenses.
Ms V White bought a first floor apartment in Barlborough in June 1996. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Comparative premises in Barlborough with an extended lease were valued about £200,000. The average amount of ground rent was £50 collected per annum. The lease expired in 2102. Having 77 years left we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus fees.