Bucklesham residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the property will be worth the same as a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Bucklesham,the lease extension experts 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 Bucklesham valuers.
Jamie owned a studio apartment in Bucklesham being sold with a lease of fraction over 59 years left. Jamie on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Jamie to exercise his statutory right. Jamie obtained expert advice and secured satisfactory resolution informally and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. O Roberts , who acquired a basement flat in Bucklesham in January 2005. The question was if we could estimate the price would likely be to prolong the lease by 90 years. Identical premises in Bucklesham with 100 year plus lease were valued about £181,600. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease lapsed in 2078. Having 52 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £30,400 and £35,200 plus costs.
In 2012 we were e-mailed by Dr Y François who, having completed a recently refurbished flat in Bucklesham in April 2002. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical properties in Bucklesham with a long lease were worth £290,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease ran out on 3 September 2098. Considering the 72 years remaining we approximated the compensation to the freeholder to extend the lease to be between £11,400 and £13,200 plus expenses.