For those whose Cowes flat is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain 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 further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a landlord in Cowes,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cowes valuers.
Subsequent to protracted correspondence with the landlord of her purpose-built flat in Cowes, Sarah initiated the lease extension process as the eighty year deadline was quickly coming. The lease extension was finalised in November 2006. The landlord’s charges were kept to an absolute minimum.
In 2010 we were called by Mr and Mrs. W White who, having acquired a first floor flat in Cowes in March 2000. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Comparative properties in Cowes with an extended lease were worth £186,000. The average amount of ground rent was £65 billed quarterly. The lease ran out on 15 May 2084. Taking into account 58 years outstanding we approximated the compensation to the landlord for the lease extension to be within £24,700 and £28,600 not including fees.
Mr and Mrs. L White purchased a purpose-built apartment in Cowes in January 2003. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparative flats in Cowes with a long lease were valued about £250,000. The average ground rent payable was £50 collected quarterly. The lease end date was in 2095. Considering the 69 years outstanding we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.