Corsham residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Corsham lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last year Alfie, started to get close to the eighty-year mark with the lease on his first floor flat in Corsham. Having purchased his home 18 years ago, the length of the lease was of no importance. Thankfully, he became aware that he would soon be paying an inflated amount for a lease extension. Alfie extended the lease just in the nick of time in May. Alfie and the landlord eventually settled on sum of £5,000 . If he had missed the deadline, the amount would have gone up by a minimum £950.
In 2011 we were phoned by Mr and Mrs. L Martinez who, having took over the lease of a garden apartment in Corsham in October 2007. The question was if we could approximate the price could be for a 90 year lease extension. Identical residencies in Corsham with 100 year plus lease were in the region of £210,000. The average amount of ground rent was £50 collected every twelve months. The lease elapsed in 2105. Taking into account 80 years outstanding we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus fees.
Last January we were e-mailed by Mr and Mrs. R Gómez , who was assigned a lease of a ground floor flat in Corsham in March 1997. The dilemma was if we could approximate the premium would be for a 90 year extension to my lease. Identical homes in Corsham with a long lease were in the region of £280,000. The average amount of ground rent was £45 collected per annum. The lease ran out in 2094. Given that there were 69 years outstanding we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.