Unfortunately that a Barnoldswick residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Barnoldswick property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher premium will be due. Most leasehold owners in Barnoldswick will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Barnoldswick,the lease extension solicitors 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 Barnoldswick valuers.
Trailing protracted negotiations with the freeholder of her first floor flat in Barnoldswick, Louise initiated the lease extension process just as the lease was approaching the critical 80-year threshold. The transaction was concluded in June 2015. The landlord’s fees were kept to an absolute minimum.
Last month we were e-mailed by Dr U Baker , who completed a first floor flat in Barnoldswick in May 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable residencies in Barnoldswick with an extended lease were in the region of £285,000. The average ground rent payable was £45 collected quarterly. The lease concluded in 2097. Taking into account 72 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.
Last Summer we were called by Mr Rory White , who took over the lease of a one bedroom flat in Barnoldswick in February 2000. The dilemma was if we could estimate the price could be to extend the lease by an additional years. Comparative properties in Barnoldswick with 100 year plus lease were valued about £233,200. The mid-range amount of ground rent was £60 invoiced quarterly. The lease terminated on 25 November 2086. Taking into account 61 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £22,800 and £26,400 not including professional charges.