Histon residential property held on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
Lender | Requirement |
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Accord Mortgages | 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. |
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; |
Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Histon,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Histon valuers.
Leon owned a studio apartment in Histon on the market with a lease of a little over 61 years remaining. Leon on an informal basis contacted his freeholder a well known London-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Leon to invoke his statutory right. Leon procured expert advice and secured satisfactory resolution informally and ending up with a market value flat.
In 2009 we were approached by Dr D Sánchez who, having moved into a basement flat in Histon in August 1998. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Identical properties in Histon with an extended lease were valued about £203,200. The mid-range amount of ground rent was £65 invoiced annually. The lease ran out in 2086. Having 61 years outstanding we calculated the compensation to the landlord to extend the lease to be between £19,000 and £22,000 not including legals.
Last Winter we were approach by Ms Jade Adams , who acquired a recently refurbished flat in Histon in October 2004. We are asked if we could estimate the premium would likely be to extend the lease by a further 90 years. Comparable flats in Histon with a long lease were in the region of £260,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease elapsed in 2097. Taking into account 72 years remaining we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.