The market value of a leasehold property in Grangetown depends on how many years the lease has left to run. If it is close to or fewer than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is ideal to start the lease extension process when the lease still has 82 years unexpired so that all matters can be concluded prior to the 80 year cut off point. Leasehold Reform legislation enables Grangetown qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a further term of ninety years. The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for many years in the future.
| 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with handle Grangetown 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 conveyancing solicitor we work with provide it.
Cameron was the the leasehold owner of a high value apartment in Grangetown being sold with a lease of just over 61 years left. Cameron on an informal basis spoke with his freeholder 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 £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Cameron to invoke his statutory right. Cameron procured expert legal guidance and secured satisfactory deal informally and sell the flat.
Last Christmas we were contacted by Mr and Mrs. E Harris , who purchased a first floor flat in Grangetown in October 2003. The question was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Comparable homes in Grangetown with an extended lease were worth £275,000. The mid-range amount of ground rent was £65 collected monthly. The lease expired on 8 April 2093. Taking into account 68 years remaining we estimated the premium to the landlord for the lease extension to be within £12,400 and £14,200 plus fees.
In 2011 we were e-mailed by Mr H Williams who, having owned a studio flat in Grangetown in August 2008. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical properties in Grangetown with an extended lease were in the region of £208,600. The average amount of ground rent was £60 billed yearly. The lease concluded in 2082. Having 57 years unexpired we approximated the premium to the freeholder for the lease extension to be between £30,400 and £35,200 plus professional charges.