For those whose Frampton on Severn flat is held on a long lease, our message is clear – if you do nothing, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to procure a lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to 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. |
| 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; |
| Coventry Building Society | 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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. |
Regardless of whether you are a tenant or a landlord in Frampton on Severn,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 in-depth market knowledge and the close ties they enjoy with Frampton on Severn valuers.
Ollie was the the leasehold owner of a studio apartment in Frampton on Severn being sold with a lease of a few days over 72 years left. Ollie on an informal basis spoke with his landlord a well known Bristol-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 an increased rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Ollie to invoke his statutory right. Ollie procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Last Spring we were approach by Mr P Martinez , who acquired a one bedroom flat in Frampton on Severn in February 2008. The dilemma was if we could shed any light on how much (roughly) premium would be to extend the lease by ninety years. Comparative premises in Frampton on Severn with 100 year plus lease were in the region of £295,000. The average ground rent payable was £50 billed yearly. The lease concluded in 2101. Considering the 75 years remaining we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 not including legals.
Dr W Bell took over the lease of a garden flat in Frampton on Severn in November 2011. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical residencies in Frampton on Severn with a long lease were valued about £250,400. The average ground rent payable was £65 invoiced per annum. The lease expired in 2090. Considering the 64 years outstanding we approximated the premium to the freeholder to extend the lease to be within £19,000 and £22,000 not including professional charges.