The market value of a leasehold property in Battlesbridge is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. Ideally one should start the lease extension process when a lease still has 82 years remaining so that all matters can be addressed in advance of the 80 year cut off point. Current legislation entitles Battlesbridge qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the premises 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 Battlesbridge leasehold, as your property will be more valuable and saleable in terms 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.
Jake owned a studio flat in Battlesbridge being sold with a lease of fraction over sixty years unexpired. Jake on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Jake to invoke his statutory right. Jake procured expert legal guidance and was able to make an informed judgement and handle with the matter and sell the property.
Mrs Alice Roberts was assigned a lease of a garden flat in Battlesbridge in August 2012. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Similar residencies in Battlesbridge with an extended lease were in the region of £265,000. The average ground rent payable was £50 collected annually. The lease elapsed in 2097. Having 73 years left we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.
Last Christmas we were contacted by Mr and Mrs. C Rose , who purchased a recently refurbished flat in Battlesbridge in November 2010. The question was if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Comparable premises in Battlesbridge with an extended lease were valued around £264,000. The mid-range ground rent payable was £60 billed monthly. The lease terminated on 15 October 2077. Given that there were 53 years remaining we approximated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 plus costs.