The market value of Downend leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is less than 80 years
It is generally accepted that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service gives you enhanced control over the value of your Downend leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In 2014 Charlie, came perilously near to the eighty-year threshold with the lease on his purpose- built apartment in Downend. In buying his home two decades ago, the lease term was of little relevance. Luckily, he became aware that he needed to take action soon on a lease extension. Charlie was able to extend his lease just under the wire last September. Charlie and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If the lease had dropped to less than 80 years, the sum would have become more costly by at least £850.
Last Spring we were phoned by Mr Sam Rivera , who moved into a purpose-built flat in Downend in September 2004. We are asked if we could approximate the price would likely be to prolong the lease by 90 years. Comparative homes in Downend with 100 year plus lease were valued about £230,800. The average ground rent payable was £60 collected annually. The lease finished on 24 September 2085. Considering the 60 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £24,700 and £28,600 exclusive of professional charges.
In 2012 we were e-mailed by Mr S Ali who, having was assigned a lease of a newly refurbished flat in Downend in September 1998. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by 90 years. Similar homes in Downend with a long lease were valued around £210,000. The average ground rent payable was £50 collected quarterly. The lease came to a finish in 2105. Given that there were 80 years remaining we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 plus fees.