The market value of a leasehold property in Cleobury Mortimer depends on how many years the lease has remaining. If it is close to or less than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension before purchasing. It is preferable to start the lease extension process when the lease still has 82 years remaining so that a lease extension can be concluded prior to the eighty year threshold. Statute enables Cleobury Mortimer qualifying lessees to acquire a lease extension of ninety years on top of the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the property 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 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; |
| 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. |
| Halifax | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Cleobury Mortimer,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cleobury Mortimer valuers.
In recent months Ryan, started to get close to the 80-year mark with the lease on his garden flat in Cleobury Mortimer. In buying his home two decades ago, the lease term was of no significance. Fortunately, it dawned on him that he would imminently be paying an escalated premium for a lease extension. Ryan arranged for a lease extension at the eleventh hour in July. Ryan and the landlord who owned the flat above ultimately settled on sum of £5,500 . If he failed to meet the deadline, the premium would have gone up by a minimum £1,125.
In 2011 we were contacted by Mr Evan Brown who, having completed a basement flat in Cleobury Mortimer in October 2008. The question was if we could estimate the premium would be for a ninety year extension to my lease. Similar homes in Cleobury Mortimer with an extended lease were in the region of £280,000. The average ground rent payable was £45 collected monthly. The lease terminated on 11 January 2095. Having 70 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of costs.
In 2009 we were approached by Mr A Sharif who, having completed a first floor apartment in Cleobury Mortimer in May 2011. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable premises in Cleobury Mortimer with 100 year plus lease were valued around £223,400. The average amount of ground rent was £60 invoiced yearly. The lease elapsed in 2084. Considering the 59 years as a residual term we approximated the premium to the landlord for the lease extension to be between £27,600 and £31,800 not including legals.