The market value of Finchampstead 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 materialy once the remaining term is less than 80 years
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Finchampstead,the lease extension experts 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 Finchampstead valuers.
Teddy owned a 2 bedroom apartment in Finchampstead being marketed with a lease of a few days over 61 years unexpired. Teddy informally contacted his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Teddy to exercise his statutory right. Teddy procured expert legal guidance and secured satisfactory deal informally and sell the flat.
In 2010 we were approached by Mrs Tia Phillips who, having purchased a garden apartment in Finchampstead in February 2011. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Comparable premises in Finchampstead with 100 year plus lease were worth £264,000. The mid-range ground rent payable was £60 invoiced yearly. The lease ended in 2078. Taking into account 53 years outstanding we estimated the premium to the landlord for the lease extension to be between £37,100 and £42,800 plus costs.
Mr and Mrs. U Turner was assigned a lease of a ground floor apartment in Finchampstead in March 2005. The question was if we could estimate the price would likely be to extend the lease by an additional years. Comparative properties in Finchampstead with 100 year plus lease were in the region of £225,400. The average ground rent payable was £45 billed per annum. The lease terminated on 18 March 2089. Considering the 64 years left we approximated the premium to the landlord to extend the lease to be within £16,200 and £18,600 plus fees.