The re-sale value of a leasehold property in Godshill depends on how long the lease has left to run. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years to run so that formalities can be addressed ahead of the 80 year threshold. Statute enables Godshill qualifying lessees to an additional term of 90 years over and above the remaining term, at a nominal rent (no ground rent). The intention of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Godiva Mortgages | 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. |
Retaining our service will provide you enhanced control over the value of your Godshill leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Toby owned a high value flat in Godshill being sold with a lease of a little over 61 years remaining. Toby informally contacted his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to an increased rent to £100 annually. No ground rent would be due on a lease extension were Toby to invoke his statutory right. Toby obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Mr and Mrs. I Bertrand moved into a one bedroom apartment in Godshill in February 2010. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Similar properties in Godshill with a long lease were valued around £260,000. The average amount of ground rent was £50 billed monthly. The lease terminated on 26 February 2096. Taking into account 71 years outstanding we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 not including costs.
In 2010 we were approached by Mr L Fournier who, having took over the lease of a first floor flat in Godshill in April 2010. The question was if we could shed any light on how much (roughly) price could be to extend the lease by ninety years. Comparable homes in Godshill with an extended lease were worth £254,200. The average amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2076. Given that there were 51 years remaining we estimated the premium to the landlord for the lease extension to be within £43,700 and £50,600 not including expenses.