Broadstairs residential property owned 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 over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as 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 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Broadstairs,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Broadstairs valuers.
Last Winter Jamie, started to get close to the 80-year threshold with the lease on his studio flat in Broadstairs. Having bought his flat two decades ago, the length of the lease was of little significance. Thankfully, he realised he would imminently be paying way over the odds for Extending the lease. Jamie arranged for a lease extension just under the wire last July. Jamie and the freeholder ultimately agreed on a premium of £5,000 . If he not met the deadline, the sum would have increased by a minimum £1,050.
In 2013 we were e-mailed by Dr B Thomas who, having acquired a one bedroom flat in Broadstairs in July 2004. The question was if we could approximate the premium could be for a 90 year lease extension. Comparable residencies in Broadstairs with an extended lease were in the region of £223,400. The mid-range ground rent payable was £60 billed monthly. The lease expired in 2085. Considering the 59 years outstanding we estimated the premium to the landlord to extend the lease to be between £27,600 and £31,800 plus professional charges.
Last February we were phoned by Dr Tommy Nelson , who took over the lease of a basement flat in Broadstairs in August 2010. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Similar residencies in Broadstairs with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 billed annually. The lease came to a finish on 23 January 2105. Taking into account 79 years unexpired we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.