The value of Castle Donington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is less than eighty years
It is generally considered that a property with over 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Castle Donington 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 conveyancer we work with provide it.
Reuben was the the leasehold owner of a conversion flat in Castle Donington on the market with a lease of fraction over 59 years outstanding. Reuben on an informal basis approached his landlord being a well known Manchester-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Reuben to exercise his statutory right. Reuben procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last Autumn we were approach by Mr and Mrs. T López , who purchased a studio apartment in Castle Donington in September 1998. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Identical residencies in Castle Donington with a long lease were valued around £166,800. The average ground rent payable was £50 invoiced yearly. The lease expired on 18 March 2075. Given that there were 50 years left we estimated the compensation to the landlord to extend the lease to be within £32,300 and £37,400 not including fees.
Last year we were phoned by Mr Elijah Gunderson , who moved into a purpose-built flat in Castle Donington in March 2007. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Similar properties in Castle Donington with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £45 billed quarterly. The lease ended in 2095. Considering the 70 years remaining we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of professional charges.