The value of Empingham leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is less than 80 years
Leasehold properties in Empingham with in excess of 100 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 upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| 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. |
| 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 Empingham,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Empingham valuers.
Half a year ago Edward, started to get near to the eighty-year threshold with the lease on his studio flat in Empingham. Having bought his flat two decades ago, the lease term was of minimal bearing. Luckily, he recognised he would imminently be paying an escalated premium for a lease extension. Edward was able to extend his lease just under the wire last July. Edward and the landlord ultimately settled on sum of £5,000 . If the lease had slid below 80 years, the amount would have gone up by a minimum £1,125.
In 2010 we were phoned by Ms Shannon Bernard who, having purchased a one bedroom apartment in Empingham in November 2008. We are asked if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparable residencies in Empingham with an extended lease were worth £265,200. The average ground rent payable was £65 invoiced every twelve months. The lease came to a finish in 2091. Given that there were 66 years remaining we estimated the compensation to the landlord to extend the lease to be between £15,200 and £17,600 not including fees.
Mr and Mrs. B Rivera acquired a newly refurbished apartment in Empingham in March 1997. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Similar premises in Empingham with 100 year plus lease were valued around £198,800. The average ground rent payable was £55 collected annually. The lease expired on 4 July 2080. Considering the 55 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £33,300 and £38,400 not including fees.