Henleaze residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a set term.
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be equivalent in value to 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Henleaze leasehold, as your property will be more valuable and marketable in respect of lease length should you decide 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.
Seth was the the leasehold proprietor of a 2 bedroom flat in Henleaze on the market with a lease of a few days over 72 years outstanding. Seth on an informal basis contacted his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 per annum. No ground rent would be payable on a lease extension were Seth to exercise his statutory right. Seth procured expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
Last Autumn we were approach by Dr Milo Ricardo , who completed a one bedroom apartment in Henleaze in November 2012. We are asked if we could approximate the price could be for a ninety year lease extension. Similar premises in Henleaze with 100 year plus lease were worth £280,000. The average amount of ground rent was £45 collected quarterly. The lease elapsed on 14 June 2096. Taking into account 70 years outstanding we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.
Last Spring we were e-mailed by Ms Danielle Stewart , who acquired a one bedroom flat in Henleaze in March 2004. The dilemma was if we could approximate the premium could be to extend the lease by ninety years. Comparable residencies in Henleaze with an extended lease were in the region of £223,400. The mid-range ground rent payable was £60 collected yearly. The lease end date was on 11 June 2085. Having 59 years unexpired we approximated the compensation to the landlord for the lease extension to be within £27,600 and £31,800 plus fees.