Heswall residential property held on a long lease is a wasting asset because a leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| 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. |
| 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. |
The conveyancers that we work with handle Heswall lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Following unsuccessful discussions with the landlord of her purpose-built apartment in Heswall, Zoe started the lease extension process just as her lease was nearing the critical 80-year deadline. The transaction completed in April 2013. The landlord’s charges were restricted to below 550 GBP.
Mrs L Gunderson completed a one bedroom apartment in Heswall in February 2002. The question was if we could approximate the premium would likely be for a ninety year extension to my lease. Identical premises in Heswall with 100 year plus lease were worth £245,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed in 2093. Taking into account 68 years unexpired we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of costs.
In 2009 we were called by Dr Zoe Kelly who, having moved into a one bedroom flat in Heswall in May 2006. The dilemma was if we could approximate the price would likely be for a ninety year lease extension. Comparable properties in Heswall with 100 year plus lease were worth £285,000. The average ground rent payable was £55 collected quarterly. The lease end date was on 11 October 2104. Taking into account 79 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of fees.