The value of Durrington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the remaining term is less than 80 years
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
The lawyers that we work with handle Durrington 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 lawyer we work with provide it.
Last October Nathan, started to get close to the eighty-year mark with the lease on his ground floor flat in Durrington. In buying his property two decades ago, the length of the lease was of little interest. by good luck, he noticed he would imminently be paying an inflated amount for a lease extension. Nathan was able to extend his lease at the eleventh hour last January. Nathan and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If he had missed the deadline, the premium would have escalated by at least £1,075.
Dr Hunter Bertrand completed a studio flat in Durrington in September 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable flats in Durrington with an extended lease were valued around £198,800. The average ground rent payable was £55 invoiced annually. The lease elapsed on 23 September 2081. Considering the 55 years as a residual term we calculated the premium to the landlord to extend the lease to be between £33,300 and £38,400 not including expenses.
Mr and Mrs. C Flores completed a recently refurbished apartment in Durrington in October 2009. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Similar homes in Durrington with 100 year plus lease were worth £300,000. The average amount of ground rent was £50 billed quarterly. The lease elapsed on 13 February 2101. Having 75 years left we approximated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of fees.