The market value of Fradley leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the unexpired lease term is less than 80 years
Leasehold properties in Fradley with in excess of 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Engaging our service will provide you better control over the value of your Fradley leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Reuben was the the leasehold owner of a studio apartment in Fradley on the market with a lease of a few days over sixty years unexpired. Reuben on an informal basis contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 yearly. No ground rent would be payable on a lease extension were Reuben to exercise his statutory right. Reuben obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Mr and Mrs. M Thomas owned a one bedroom apartment in Fradley in January 2004. The question was if we could estimate the price would be to prolong the lease by a further 90 years. Comparative properties in Fradley with an extended lease were valued about £275,000. The average ground rent payable was £55 billed monthly. The lease elapsed on 1 January 2102. Considering the 76 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.
Mr and Mrs. I Young owned a ground floor apartment in Fradley in May 1996. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Similar homes in Fradley with a long lease were in the region of £176,200. The mid-range amount of ground rent was £65 billed monthly. The lease came to a finish in 2082. Having 56 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 plus professional charges.