Cheslyn Hay residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Cheslyn Hay leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Teddy, started to get close to the 80-year mark with the lease on his basement apartment in Cheslyn Hay. Having purchased his property 18 years previously, the unexpired term was of little importance. Fortunately, he recognised he needed to take steps soon on a lease extension. Teddy extended the lease just under the wire in August. Teddy and the landlord eventually settled on sum of £6,000 . If the lease had fallen to less than eighty years, the price would have increased by a minimum £950.
Last year we were e-mailed by Mr and Mrs. N Lefèvre , who bought a purpose-built apartment in Cheslyn Hay in January 2010. The dilemma was if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Comparative homes in Cheslyn Hay with an extended lease were valued about £242,600. The average amount of ground rent was £45 invoiced annually. The lease finished in 2093. Considering the 67 years remaining we approximated the premium to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of expenses.
Mr and Mrs. J Campbell owned a one bedroom flat in Cheslyn Hay in November 1997. The question was if we could approximate the premium would be to prolong the lease by 90 years. Similar homes in Cheslyn Hay with 100 year plus lease were worth £280,000. The average ground rent payable was £55 invoiced annually. The lease finished on 22 April 2104. Considering the 78 years remaining we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including legals.