Groby residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
Leasehold residencies in Groby with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Regardless of whether you are a tenant or a landlord in Groby,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 in-depth market knowledge and the close ties they enjoy with Groby valuers.
Finley was the the leasehold owner of a conversion flat in Groby on the market with a lease of a little over sixty years left. Finley informally approached 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 an increased rent to £125 per annum. No ground rent would be due on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2012 we were phoned by Mr and Mrs. B Rodríguez who, having was assigned a lease of a studio flat in Groby in August 2007. We are asked if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparable flats in Groby with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced every twelve months. The lease concluded on 6 February 2100. Taking into account 75 years unexpired we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
In 2011 we were phoned by Dr Y Murphy who, having moved into a one bedroom flat in Groby in October 2009. We are asked if we could estimate the price would be for a 90 year extension to my lease. Similar homes in Groby with a long lease were valued about £173,800. The mid-range ground rent payable was £65 invoiced per annum. The lease finished in 2080. Considering the 55 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £31,400 and £36,200 not including legals.