The market value of Hadleigh leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the unexpired lease term is below than eighty years
Leasehold properties in Hadleigh with more than 100 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Halifax | 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Irrespective of whether you are a tenant or a landlord in Hadleigh,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hadleigh valuers.
Half a year ago John, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Hadleigh. In buying his property two decades ago, the length of the lease was of minimal significance. Fortunately, he recognised he needed to take steps soon on a lease extension. John was able to extend his lease at the eleventh hour in January. John and the freeholder eventually settled on a premium of £5,500 . If he failed to meet the deadline, the price would have escalated by a minimum £850.
Last Summer we were contacted by Ms Eleanor Taylor , who bought a one bedroom flat in Hadleigh in May 2012. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Identical flats in Hadleigh with 100 year plus lease were in the region of £225,800. The average ground rent payable was £60 invoiced every twelve months. The lease ended in 2086. Having 60 years left we approximated the compensation to the landlord to extend the lease to be between £23,800 and £27,400 exclusive of professional charges.
Dr R Miller owned a recently refurbished flat in Hadleigh in July 2008. We are asked if we could approximate the premium would be to prolong the lease by a further 90 years. Identical homes in Hadleigh with an extended lease were worth £210,000. The average ground rent payable was £50 invoiced annually. The lease concluded in 2106. Taking into account 80 years unexpired we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.