Droitwich residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with procure Droitwich 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.
Subsequent to protracted correspondence with the landlord of her leasehold flat in Droitwich, Laura initiated the lease extension process as the 80 year threshold was fast nearing. The transaction was concluded in November 2005. The landlord’s fees were negotiated to below 650 GBP.
Mr and Mrs. W Morris completed a garden apartment in Droitwich in February 1998. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparable properties in Droitwich with a long lease were in the region of £183,600. The mid-range amount of ground rent was £65 billed per annum. The lease concluded in 2083. Having 57 years remaining we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 plus fees.
Last year we were phoned by Dr Louise Michel , who moved into a studio flat in Droitwich in April 2002. The question was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical residencies in Droitwich with a long lease were worth £245,000. The average ground rent payable was £45 collected monthly. The lease finished in 2094. Given that there were 68 years unexpired we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of expenses.