Eccleshall leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Eccleshall residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Eccleshall you must investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Eccleshall with more than 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant 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; |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Eccleshall,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 in-depth market knowledge and the close ties they enjoy with Eccleshall valuers.
Half a year ago Henry, started to get near to the 80-year mark with the lease on his two bedroom flat in Eccleshall. In buying his flat 18 years ago, the length of the lease was of little interest. Fortunately, he realised he needed to take steps soon on a lease extension. Henry was able to extend his lease just under the wire last March. Henry and the freeholder eventually agreed on sum of £6,000 . If the lease had fallen to less than eighty years, the sum would have escalated by at least £900.
Mr and Mrs. L Ali completed a first floor flat in Eccleshall in March 1997. The question was if we could estimate the price could be to extend the lease by ninety years. Identical premises in Eccleshall with a long lease were worth £260,200. The average amount of ground rent was £65 invoiced every twelve months. The lease expired on 25 April 2092. Given that there were 66 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 not including expenses.
Mrs S Scott owned a one bedroom apartment in Eccleshall in November 2008. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Identical premises in Eccleshall with a long lease were worth £198,800. The mid-range amount of ground rent was £55 collected every twelve months. The lease terminated in 2081. Given that there were 55 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of costs.