Borehamwood residential property held on a long lease is a wasting asset as the leaseholder only owns the property for a set term.
Leasehold premises in Borehamwood with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Borehamwood,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Borehamwood valuers.
Lewis owned a 2 bedroom apartment in Borehamwood being sold with a lease of a few days over 72 years unexpired. Lewis informally spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Lewis to exercise his statutory right. Lewis obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Last year we were approach by Mr and Mrs. B Norbert , who moved into a garden flat in Borehamwood in May 2002. We are asked if we could approximate the price would be to extend the lease by an additional years. Comparative premises in Borehamwood with an extended lease were worth £260,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease ended in 2098. Having 72 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus legals.
An example of a Lease Extension matter before the tribunal for a Borehamwood premises is Ground Floor Maisonette 17 Milton Road in January 2014. The Tribunal determined the premium payable by the Applicant to the should be £13,299 This case related to 1 flat. The remaining number of years on the lease was 71.73 years.