For those whose Battle home is held on a long lease, our message is clear – if no remedial action is taken, your property will eventually revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for decades to come.
|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 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
Using our service gives you better control over the value of your Battle leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Cameron owned a 2 bedroom flat in Battle on the market with a lease of a little over fifty eight years remaining. Cameron informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Cameron to invoke his statutory right. Cameron obtained expert legal guidance and secured an acceptable resolution informally and readily saleable.
In 2014 we were phoned by Ms Gemma Williams who, having took over the lease of a ground floor flat in Battle in March 2001. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparable properties in Battle with an extended lease were worth £295,000. The mid-range amount of ground rent was £45 collected annually. The lease finished on 5 July 2096. Given that there were 74 years unexpired we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including legals.
Last year we were phoned by Dr James Taylor , who completed a one bedroom flat in Battle in November 1999. We are asked if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable flats in Battle with an extended lease were worth £250,400. The average ground rent payable was £65 invoiced monthly. The lease ran out in 2086. Considering the 64 years left we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 exclusive of legals.