Farnham residential property owned on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| 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 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 Farnham,the lease extension solicitors 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 Farnham valuers.
In the wake of 9 months of protracted correspondence with the landlord of her one bedroom flat in Farnham, Rebecca started the lease extension process just as the lease was nearing the critical eighty-year deadline. The legal work was concluded in June 2015. The landlord’s fees were kept to an absolute minimum.
Ms Hannah Torres moved into a basement apartment in Farnham in January 1995. The dilemma was if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Identical properties in Farnham with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease elapsed on 19 February 2089. Taking into account 63 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of costs.
Last Winter we were contacted by Mr and Mrs. L Morel , who completed a garden apartment in Farnham in January 1997. The question was if we could estimate the price would be to extend the lease by a further 90 years. Similar flats in Farnham with a long lease were worth £181,600. The mid-range ground rent payable was £55 invoiced every twelve months. The lease ran out on 24 October 2078. Having 52 years left we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 plus legals.