The market value of Clapham and Salph End leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the residence 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Chelsea Building Society | 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. |
Using our service gives you increased control over the value of your Clapham and Salph End leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Thomas was the the leasehold proprietor of a 2 bedroom flat in Clapham and Salph End on the market with a lease of a few days over sixty years outstanding. Thomas informally approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Thomas to invoke his statutory right. Thomas obtained expert advice and secured an acceptable deal without resorting to tribunal and sell the property.
Ms Natasha Baker acquired a one bedroom flat in Clapham and Salph End in January 2006. We are asked if we could approximate the price could be to prolong the lease by a further 90 years. Comparable premises in Clapham and Salph End with 100 year plus lease were worth £235,200. The mid-range ground rent payable was £45 invoiced every twelve months. The lease came to a finish on 26 September 2091. Having 66 years remaining we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
Dr W Bailey moved into a first floor apartment in Clapham and Salph End in April 2006. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Comparative properties in Clapham and Salph End with an extended lease were worth £280,000. The average amount of ground rent was £55 collected yearly. The lease expired on 6 July 2102. Having 77 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus legals.