Bishop Auckland residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be equivalent in value to a freehold for many years in the future.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
Using our service will provide you increased control over the value of your Bishop Auckland 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.
Off the back of unsuccessful correspondence with the freeholder of her basement flat in Bishop Auckland, Alice commenced the lease extension process just as the lease was nearing the crucial 80-year threshold. The lease extension completed in November 2015. The freeholder’s fees were negotiated to below six hundred GBP.
In 2009 we were phoned by Mrs Sarah Brown who, having moved into a one bedroom apartment in Bishop Auckland in October 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Comparable flats in Bishop Auckland with 100 year plus lease were valued around £225,800. The average ground rent payable was £60 billed every twelve months. The lease expired on 1 September 2086. Given that there were 60 years left we calculated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 plus legals.
Mr Mason Alexander purchased a purpose-built flat in Bishop Auckland in June 2009. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar homes in Bishop Auckland with an extended lease were valued about £210,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease elapsed in 2106. Taking into account 80 years as a residual term we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of professional charges.