The market value of Boscastle 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 escalate significantly once the remaining term is below than eighty years
Leasehold premises in Boscastle with in excess of one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Boscastle,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 experience and the close ties they enjoy with Boscastle valuers.
Jude owned a conversion flat in Boscastle on the market with a lease of fraction over fifty eight years unexpired. Jude informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 per annum. No ground rent would be payable on a lease extension were Jude to exercise his statutory right. Jude obtained expert advice and secured satisfactory resolution without resorting to tribunal and sell the flat.
Last June we were contacted by Mr and Mrs. D Smith , who bought a one bedroom flat in Boscastle in February 2006. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Similar properties in Boscastle with an extended lease were valued about £174,200. The average amount of ground rent was £55 invoiced per annum. The lease ended on 25 February 2076. Considering the 51 years left we estimated the premium to the landlord to extend the lease to be between £31,400 and £36,200 exclusive of professional charges.
Last Summer we were contacted by Mr David Mercier , who was assigned a lease of a garden apartment in Boscastle in August 1999. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable homes in Boscastle with 100 year plus lease were valued around £285,000. The mid-range ground rent payable was £45 collected monthly. The lease lapsed in 2096. Having 71 years left we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including fees.