For those whose Barlborough property is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years ahead.
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; |
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. |
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. |
Engaging our service gives you increased control over the value of your Barlborough leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the landlord of her studio flat in Barlborough, Millie commenced the lease extension process just as the lease was nearing the all-important eighty-year deadline. The legal work was concluded in July 2010. The freeholder’s fees were kept to an absolute minimum.
In 2009 we were e-mailed by Mr Theo King who, having purchased a studio flat in Barlborough in November 2009. The dilemma was if we could estimate the price would be to extend the lease by 90 years. Comparable homes in Barlborough with a long lease were valued around £205,000. The mid-range amount of ground rent was £50 billed yearly. The lease came to a finish in 2103. Given that there were 79 years left we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus expenses.
Last Spring we were contacted by Mr and Mrs. S François , who acquired a newly refurbished flat in Barlborough in July 2012. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Similar residencies in Barlborough with an extended lease were worth £275,000. The mid-range amount of ground rent was £65 billed per annum. The lease concluded on 12 May 2092. Having 68 years outstanding we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 plus professional charges.