Frampton on Severn residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence 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. |
| 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. |
| Lloyds TSB Scotland | Mortgage term plus 30 years subject to an overall minimum term of 70 years |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower. |
Irrespective of whether you are a tenant or a freeholder in Frampton on Severn,the lease extension lawyers 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 Frampton on Severn valuers.
Henry owned a conversion flat in Frampton on Severn being sold with a lease of a little over 72 years outstanding. Henry informally spoke with his freeholder a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Henry to invoke his statutory right. Henry procured expert legal guidance and secured satisfactory deal informally and sell the property.
Last Spring we were contacted by Mr and Mrs. W Turner , who was assigned a lease of a garden flat in Frampton on Severn in October 2008. The question was if we could estimate the premium would likely be to prolong the lease by an additional years. Comparable properties in Frampton on Severn with 100 year plus lease were worth £181,600. The mid-range amount of ground rent was £55 billed annually. The lease expired on 17 August 2074. Given that there were 52 years outstanding we approximated the compensation to the landlord to extend the lease to be within £30,400 and £35,200 not including professional charges.
In 2010 we were contacted by Mr T Bennett who, having was assigned a lease of a one bedroom apartment in Frampton on Severn in May 1998. The question was if we could estimate the price would be for a 90 year extension to my lease. Comparative residencies in Frampton on Severn with an extended lease were in the region of £290,000. The average amount of ground rent was £45 billed quarterly. The lease elapsed on 9 October 2094. Taking into account 72 years outstanding we estimated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of costs.