The value of Hagley 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 escalate materialy once the remaining term is less than 80 years
It is generally accepted that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Hagley leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Ibrahim, started to get close to the 80-year mark with the lease on his garden flat in Hagley. In buying his home 19 years ago, the length of the lease was of little relevance. Luckily, he noticed he needed to take action soon on Extending the lease. Ibrahim extended the lease just ahead of time in June. Ibrahim and the landlord ultimately settled on the final figure of £5,500 . If the lease had fallen below 80 years, the sum would have gone up by at least £975.
Last year we were e-mailed by Dr Isabelle James , who was assigned a lease of a ground floor flat in Hagley in January 2003. The question was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparable properties in Hagley with a long lease were worth £254,200. The average amount of ground rent was £60 billed per annum. The lease came to a finish in 2076. Taking into account 51 years left we estimated the premium to the freeholder for the lease extension to be within £43,700 and £50,600 plus legals.
Last Winter we were phoned by Dr T Edwards , who owned a newly refurbished apartment in Hagley in April 1997. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Identical homes in Hagley with 100 year plus lease were valued about £210,600. The average amount of ground rent was £45 billed per annum. The lease ran out in 2087. Taking into account 62 years remaining we approximated the compensation to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of legals.