For those whose Church Stretton home is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the residence will be worth the same as 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 are not acceptable. 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; |
| 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. |
| Lloyds TSB Scotland | 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
Engaging our service will provide you better control over the value of your Church Stretton leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the freeholder of her leasehold flat in Church Stretton, Eleanor started the lease extension process as the eighty year threshold was rapidly approaching. The lease extension completed in April 2005. The landlord’s costs were kept to an absolute minimum.
In 2010 we were contacted by Mr Blake Jones who, having took over the lease of a garden apartment in Church Stretton in February 2005. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparative properties in Church Stretton with a long lease were in the region of £242,600. The mid-range ground rent payable was £45 invoiced monthly. The lease expired on 20 September 2093. Given that there were 67 years unexpired we approximated the premium to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of expenses.
Mrs Jessica Cooper owned a purpose-built apartment in Church Stretton in September 2012. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar properties in Church Stretton with a long lease were valued about £280,000. The mid-range ground rent payable was £55 collected per annum. The lease expiry date was on 24 September 2104. Having 78 years unexpired we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 not including legals.