Fleet residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Fleet can be a difficult process. We recommend you procure guidance from a lawyer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Fleet lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Thomas was the the leasehold owner of a studio flat in Fleet on the market with a lease of fraction over 59 years remaining. Thomas on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Thomas to exercise his statutory right. Thomas obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
Mrs H Moore acquired a one bedroom flat in Fleet in May 2012. The question was if we could approximate the price would likely be to prolong the lease by ninety years. Comparable premises in Fleet with an extended lease were valued about £300,000. The average ground rent payable was £50 billed annually. The lease concluded on 14 October 2101. Given that there were 75 years left we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 plus costs.
In 2014 we were phoned by Dr Ibrahim Adams who, having bought a first floor flat in Fleet in June 2003. The question was if we could shed any light on how much (roughly) premium would be for a ninety year extension to my lease. Comparative homes in Fleet with 100 year plus lease were worth £250,400. The average ground rent payable was £65 collected per annum. The lease ended in 2090. Given that there were 64 years as a residual term we approximated the premium to the landlord to extend the lease to be between £19,000 and £22,000 not including legals.