The market value of Berkhamsted leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is below than 80 years
Leasehold residencies in Berkhamsted with in excess of 100 years remaining 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 property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Chelsea 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Berkhamsted,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Berkhamsted valuers.
Jonathan owned a 2 bedroom apartment in Berkhamsted on the market with a lease of just over 72 years remaining. Jonathan informally spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jonathan to exercise his statutory right. Jonathan obtained expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
In 2011 we were e-mailed by Ms T Green who, having was assigned a lease of a one bedroom flat in Berkhamsted in March 2006. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Comparative premises in Berkhamsted with a long lease were valued about £173,800. The average amount of ground rent was £65 invoiced every twelve months. The lease termination date was in 2081. Taking into account 55 years remaining we calculated the premium to the freeholder for the lease extension to be within £31,400 and £36,200 not including expenses.
Last year we were phoned by Dr Naomi Anderson , who moved into a ground floor flat in Berkhamsted in November 2001. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparable flats in Berkhamsted with a long lease were worth £235,200. The mid-range amount of ground rent was £45 billed monthly. The lease concluded on 2 February 2092. Considering the 66 years unexpired we calculated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus costs.