The market value of East Grinstead 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 significantly once the remaining term is less than eighty years
Leasehold residencies in East Grinstead with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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. |
Irrespective of whether you are a tenant or a landlord in East Grinstead,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with East Grinstead valuers.
Edward was the the leasehold proprietor of a high value apartment in East Grinstead being sold with a lease of a few days over fifty eight years remaining. Edward on an informal basis contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be due on a lease extension were Edward to exercise his statutory right. Edward procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
Last Christmas we were called by Dr Arthur Garcia , who moved into a first floor apartment in East Grinstead in May 1997. The dilemma was if we could approximate the price could be to prolong the lease by 90 years. Identical flats in East Grinstead with 100 year plus lease were in the region of £193,400. The mid-range amount of ground rent was £65 billed quarterly. The lease elapsed in 2085. Given that there were 59 years left we estimated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of costs.
In 2011 we were phoned by Ms Alexandra Stewart who, having was assigned a lease of a first floor flat in East Grinstead in October 2006. The dilemma was if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Identical properties in East Grinstead with a long lease were in the region of £250,000. The mid-range ground rent payable was £50 billed every twelve months. The lease ran out on 7 May 2096. Considering the 70 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.