The value of Craven Arms leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| 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. |
| 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 handle Craven Arms 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 conveyancing solicitor we work with provide it.
During the course of the last few months Michael, came perilously near to the 80-year threshold with the lease on his purpose- built apartment in Craven Arms. In buying his flat two decades ago, the lease term was of no interest. Fortunately, it dawned on him that he would imminently be paying an inflated amount for Extending the lease. Michael arranged for a lease extension just under the wire last April. Michael and the landlord who owned the flat above in the end agreed on sum of £5,500 . If he had missed the deadline, the figure would have increased by at least £975.
In 2010 we were approached by Dr Jason Young who, having bought a recently refurbished flat in Craven Arms in January 2008. The question was if we could approximate the premium would be for a ninety year extension to my lease. Identical properties in Craven Arms with a long lease were in the region of £240,600. The average ground rent payable was £60 collected yearly. The lease finished on 25 August 2088. Having 62 years remaining we estimated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 not including costs.
In 2011 we were contacted by Mr and Mrs. Y Lee who, having was assigned a lease of a purpose-built apartment in Craven Arms in March 1998. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Similar premises in Craven Arms with an extended lease were in the region of £174,200. The mid-range amount of ground rent was £55 invoiced monthly. The lease lapsed in 2077. Taking into account 51 years as a residual term we estimated the premium to the landlord to extend the lease to be within £31,400 and £36,200 exclusive of fees.