The market value of Biddulph leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is less than eighty years
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
| 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. |
The conveyancing solicitors that we work with procure Biddulph lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In recent months Finley, started to get near to the eighty-year mark with the lease on his one bedroom flat in Biddulph. In buying his flat 18 years previously, the unexpired term was of no significance. Luckily, he recognised he would soon be paying an escalated premium for Extending the lease. Finley was able to extend his lease just in the nick of time in September. Finley and the freeholder eventually agreed on sum of £6,000 . If he not met the deadline, the amount would have become more costly by a minimum £1,050.
In 2010 we were e-mailed by Dr Sebastian White who, having completed a ground floor apartment in Biddulph in January 1998. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable premises in Biddulph with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 billed monthly. The lease finished on 12 November 2076. Having 50 years left we calculated the premium to the freeholder for the lease extension to be within £44,700 and £51,600 not including legals.
Last year we were approach by Mr and Mrs. V García , who owned a ground floor apartment in Biddulph in March 1995. We are asked if we could approximate the price would be to prolong the lease by ninety years. Comparative homes in Biddulph with an extended lease were valued about £208,200. The average amount of ground rent was £65 billed monthly. The lease concluded in 2087. Given that there were 61 years outstanding we estimated the premium to the landlord for the lease extension to be within £19,000 and £22,000 not including fees.