The market value of Booker leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than eighty years
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| 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. |
| 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 |
Regardless of whether you are a tenant or a landlord in Booker,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Booker valuers.
Half a year ago Jackson, started to get close to the 80-year threshold with the lease on his garden apartment in Booker. Having bought his property two decades ago, the length of the lease was of little bearing. Fortunately, he realised he needed to take steps soon on a lease extension. Jackson extended the lease at the eleventh hour in April. Jackson and the landlord subsequently agreed on the final figure of £5,500 . If the lease had fallen below eighty years, the premium would have increased by at least £1,025.
In 2011 we were contacted by Mr O Collins who, having was assigned a lease of a ground floor apartment in Booker in May 2011. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical premises in Booker with a long lease were worth £210,600. The average amount of ground rent was £45 invoiced annually. The lease finished on 24 May 2087. Taking into account 62 years unexpired we estimated the premium to the landlord to extend the lease to be between £18,100 and £20,800 plus legals.
In 2012 we were contacted by Mr and Mrs. G Bailey who, having was assigned a lease of a recently refurbished flat in Booker in June 2004. We are asked if we could approximate the price could be to prolong the lease by an additional years. Similar residencies in Booker with 100 year plus lease were in the region of £265,000. The average ground rent payable was £50 collected quarterly. The lease came to a finish on 2 May 2098. Taking into account 73 years left we estimated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.