Clapton residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
Engaging our service gives you increased control over the value of your Clapton leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Tyler, came critically close to the 80-year mark with the lease on his first floor flat in Clapton. In buying his property 19 years previously, the length of the lease was of little bearing. As luck would have it, he noticed he needed to take steps soon on a lease extension. Tyler extended the lease at the eleventh hour last September. Tyler and the freeholder in the end agreed on sum of £5,000 . If the lease had slipped to less than eighty years, the price would have escalated by a minimum £900.
Last Christmas we were phoned by Ms T Moreau , who owned a studio flat in Clapton in September 2005. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparative residencies in Clapton with 100 year plus lease were worth £254,200. The mid-range amount of ground rent was £60 invoiced monthly. The lease ran out in 2077. Considering the 51 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Clapton property is 104 Nightingale Road in May 2009. The Tribunal's Decision is that the premium torbe paid for the enfranchisement in this case is £112,174 This case affected 10 flats. The unexpired residue of the current lease was 71.25 years.