Beaufort residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
Leasehold properties in Beaufort with in excess of one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Using our service will provide you enhanced control over the value of your Beaufort leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Ryan was the the leasehold owner of a conversion apartment in Beaufort on the market with a lease of a little over 61 years unexpired. Ryan on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Ryan to exercise his statutory right. Ryan obtained expert legal guidance and secured an acceptable resolution without going to tribunal and readily saleable.
Last Autumn we were contacted by Mr and Mrs. K Moore , who bought a garden flat in Beaufort in April 2010. The question was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Comparative residencies in Beaufort with 100 year plus lease were valued around £257,800. The mid-range amount of ground rent was £65 collected every twelve months. The lease ended on 16 April 2090. Having 65 years unexpired we estimated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 exclusive of professional charges.
In 2012 we were contacted by Ms Sophia Lee who, having completed a ground floor flat in Beaufort in September 1996. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by a further 90 years. Comparative premises in Beaufort with an extended lease were worth £191,400. The mid-range ground rent payable was £55 invoiced per annum. The lease expired on 14 February 2079. Considering the 54 years left we calculated the compensation to the freeholder to extend the lease to be within £34,200 and £39,600 plus professional charges.