The market value of Cannock leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate materialy once the remaining term is less than eighty years
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
The lawyers that we work with undertake Cannock lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Trailing protracted negotiations with the freeholder of her two bedroom apartment in Cannock, Rachel commenced the lease extension process as the eighty year deadline was swiftly approaching. The lease extension was finalised in February 2014. The landlord’s costs were restricted to under 500 pounds.
Last Summer we were approach by Dr Y André , who bought a first floor apartment in Cannock in September 2008. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Comparative residencies in Cannock with a long lease were worth £166,800. The average ground rent payable was £55 invoiced per annum. The lease expiry date was on 13 March 2076. Given that there were 50 years unexpired we calculated the premium to the freeholder to extend the lease to be between £32,300 and £37,400 exclusive of professional charges.
Last May we were called by Mr H King , who took over the lease of a one bedroom flat in Cannock in November 2000. We are asked if we could approximate the premium would likely be to extend the lease by 90 years. Similar flats in Cannock with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 invoiced quarterly. The lease ended in 2096. Having 70 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.