Earlswood residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold premises in Earlswood with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Earlswood leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Milo owned a conversion apartment in Earlswood being sold with a lease of a little over 59 years remaining. Milo informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Milo to invoke his statutory right. Milo obtained expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
In 2012 we were approached by Dr Y Lefèvre who, having bought a first floor apartment in Earlswood in May 2002. The question was if we could estimate the price would likely be to prolong the lease by 90 years. Comparable residencies in Earlswood with 100 year plus lease were in the region of £171,800. The mid-range amount of ground rent was £55 collected quarterly. The lease finished on 21 July 2076. Considering the 50 years remaining we approximated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 exclusive of fees.
Dr A Cooper purchased a first floor flat in Earlswood in April 2000. The dilemma was if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Earlswood with a long lease were valued about £280,000. The mid-range ground rent payable was £45 collected per annum. The lease lapsed on 12 May 2096. Considering the 70 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.