The value of Denton 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 unexpired lease term is below than 80 years
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Denton leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Nathan was the the leasehold owner of a high value apartment in Denton being sold with a lease of a little over 59 years left. Nathan on an informal basis approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were Nathan to invoke his statutory right. Nathan procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
In 2010 we were phoned by Mr and Mrs. F Hill who, having took over the lease of a one bedroom flat in Denton in October 2010. The question was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by 90 years. Similar flats in Denton with an extended lease were worth £280,000. The average ground rent payable was £55 billed quarterly. The lease concluded on 11 January 2103. Considering the 78 years left we calculated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including legals.
In 2009 we were contacted by Dr Isabel Taylor who, having completed a ground floor apartment in Denton in July 1995. We are asked if we could estimate the premium would be for a 90 year lease extension. Identical residencies in Denton with 100 year plus lease were worth £186,000. The mid-range amount of ground rent was £65 collected yearly. The lease came to a finish on 21 July 2083. Taking into account 58 years as a residual term we estimated the premium to the landlord for the lease extension to be within £24,700 and £28,600 plus expenses.