The re-sale value of a leasehold property in Greystones is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to buying. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be concluded in advance of the eighty year threshold. Statute enables Greystones qualifying lessees to an additional term of ninety years in addition to the remaining term, at a peppercorn rent (no ground rent). The purpose 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 accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Greystones,the lease extension solicitors 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 Greystones valuers.
Last year Leo, started to get near to the 80-year threshold with the lease on his basement flat in Greystones. Having bought his property 18 years ago, the unexpired term was of no bearing. Fortunately, he recognised he would soon be paying an escalated premium for Extending the lease. Leo was able to extend his lease at the eleventh hour last April. Leo and the freeholder eventually settled on a premium of £6,000 . If he not met the deadline, the amount would have escalated by at least £925.
Mr Jude Cook moved into a purpose-built apartment in Greystones in June 2008. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparable properties in Greystones with an extended lease were valued around £233,200. The mid-range amount of ground rent was £60 invoiced yearly. The lease expiry date was on 28 August 2086. Taking into account 61 years outstanding we estimated the compensation to the landlord for the lease extension to be between £22,800 and £26,400 not including professional charges.
Last Winter we were e-mailed by Mrs M Gómez , who purchased a garden apartment in Greystones in November 1997. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Similar flats in Greystones with an extended lease were in the region of £166,800. The mid-range amount of ground rent was £50 collected per annum. The lease expiry date was in 2075. Considering the 50 years unexpired we approximated the premium to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of costs.