The market value of Great Missenden leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is below than eighty years
Leasehold properties in Great Missenden with in excess of 100 years unexpired on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Using our service gives you better control over the value of your Great Missenden leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Muhammad was the the leasehold proprietor of a studio apartment in Great Missenden being marketed with a lease of a few days over 59 years remaining. Muhammad on an informal basis contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Muhammad to invoke his statutory right. Muhammad obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.
In 2009 we were e-mailed by Mr and Mrs. A Kelly who, having took over the lease of a basement flat in Great Missenden in March 2002. The question was if we could estimate the price would likely be to prolong the lease by an additional years. Similar premises in Great Missenden with a long lease were in the region of £193,400. The average amount of ground rent was £65 collected annually. The lease lapsed on 12 October 2085. Considering the 59 years outstanding we estimated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus fees.
In 2011 we were approached by Dr Kate Davis who, having purchased a first floor flat in Great Missenden in September 2007. We are asked if we could estimate the price would be for a 90 year lease extension. Comparable homes in Great Missenden with an extended lease were worth £250,000. The average ground rent payable was £50 invoiced monthly. The lease elapsed on 25 October 2096. Given that there were 70 years unexpired we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.