The value of Freshwater 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
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Freshwater lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Nathan was the the leasehold proprietor of a studio apartment in Freshwater on the market with a lease of fraction over sixty years unexpired. Nathan informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Nathan to invoke his statutory right. Nathan procured expert advice and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
In 2013 we were approached by Mr and Mrs. Y Cox who, having purchased a basement flat in Freshwater in July 2002. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparative premises in Freshwater with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £55 invoiced per annum. The lease lapsed in 2102. Taking into account 77 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including legals.
Ms Jordan González was assigned a lease of a basement apartment in Freshwater in January 1999. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative homes in Freshwater with a long lease were in the region of £183,600. The mid-range amount of ground rent was £65 collected every twelve months. The lease concluded on 14 July 2082. Taking into account 57 years left we estimated the compensation to the landlord to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.