The re-sale value of a leasehold property in Birkenshaw depends on how long the lease has remaining. If it is close to or fewer than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be concluded ahead of the 80 year cut off point. Leasehold Reform legislation enables Birkenshaw qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Halifax | 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Birkenshaw,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Birkenshaw valuers.
Milo owned a conversion apartment in Birkenshaw being marketed with a lease of fraction over fifty eight years left. Milo informally contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Milo to invoke his statutory right. Milo obtained expert legal guidance and secured an acceptable deal informally and sell the property.
Last Summer we were called by Dr Ali Bailey , who owned a one bedroom apartment in Birkenshaw in February 2005. The dilemma was if we could shed any light on how much (approximately) price could be to prolong the lease by an additional years. Comparative homes in Birkenshaw with a long lease were worth £285,000. The mid-range ground rent payable was £45 collected per annum. The lease concluded in 2098. Given that there were 72 years outstanding we calculated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including costs.
Last Christmas we were e-mailed by Mr and Mrs. C Petit , who purchased a basement apartment in Birkenshaw in April 2004. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical properties in Birkenshaw with an extended lease were in the region of £233,200. The average ground rent payable was £60 collected every twelve months. The lease elapsed in 2087. Having 61 years outstanding we estimated the premium to the freeholder for the lease extension to be within £22,800 and £26,400 not including fees.