The market value of Charlbury 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 substantially once the unexpired lease term is less than eighty years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Charlbury leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jackson owned a conversion apartment in Charlbury being sold with a lease of a few days over fifty eight years left. Jackson informally approached his landlord a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Jackson to invoke his statutory right. Jackson obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Last year we were approach by Dr T Laurent , who purchased a studio flat in Charlbury in September 2009. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative residencies in Charlbury with an extended lease were valued about £285,000. The average amount of ground rent was £55 collected per annum. The lease ended in 2104. Considering the 79 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.
Last Christmas we were e-mailed by Mrs Naomi Bennett , who moved into a purpose-built apartment in Charlbury in November 2002. The dilemma was if we could approximate the price could be to prolong the lease by a further 90 years. Similar properties in Charlbury with an extended lease were valued around £193,400. The average amount of ground rent was £65 billed annually. The lease concluded in 2084. Considering the 59 years outstanding we calculated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of legals.