There is no doubt about it a leasehold property in Carmel is a wasting asset as a result of the shortening lease. If the lease has, more than one hundred years remaining then this decrease may be of little impact that being said there will become a stage when a lease has under than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease without delay. The majority of flat owners in Carmel will meet the qualifying criteria; however a conveyancer will be able to confirm if you qualify for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to 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 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Engaging our service will provide you increased control over the value of your Carmel leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Eliot owned a 2 bedroom flat in Carmel on the market with a lease of a few days over fifty eight years left. Eliot on an informal basis contacted his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot procured expert legal guidance and secured satisfactory deal without resorting to tribunal and ending up with a market value flat.
In 2011 we were phoned by Mrs Kayleigh Norbert who, having purchased a garden flat in Carmel in February 2007. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative homes in Carmel with an extended lease were valued about £275,000. The mid-range ground rent payable was £65 collected monthly. The lease lapsed on 21 June 2093. Taking into account 68 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
Last Autumn we were approach by Mrs Kelsey Martin , who bought a ground floor flat in Carmel in October 2004. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by 90 years. Comparable premises in Carmel with an extended lease were valued around £208,600. The mid-range ground rent payable was £60 collected per annum. The lease ended on 19 February 2082. Taking into account 57 years left we estimated the compensation to the freeholder to extend the lease to be between £30,400 and £35,200 plus costs.