The value of Holywell leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the unexpired lease term is less than eighty years
Leasehold residencies in Holywell with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you better control over the value of your Holywell leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Gabriel, started to get close to the 80-year mark with the lease on his ground floor apartment in Holywell. Having purchased his home 19 years previously, the length of the lease was of little relevance. Luckily, he realised he would imminently be paying an escalated premium for a lease extension. Gabriel extended the lease just under the wire last March. Gabriel and the freeholder eventually agreed on an amount of £6,000 . If he failed to meet the deadline, the premium would have become more costly by a minimum £925.
Ms Natasha Martinez was assigned a lease of a basement flat in Holywell in November 2002. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar residencies in Holywell with 100 year plus lease were in the region of £205,000. The average amount of ground rent was £50 billed yearly. The lease terminated on 21 July 2105. Taking into account 79 years unexpired we estimated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus costs.
In 2013 we were e-mailed by Mrs A Leroy who, having moved into a one bedroom apartment in Holywell in November 2010. The dilemma was if we could approximate the premium could be to prolong the lease by an additional years. Comparable residencies in Holywell with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £65 billed monthly. The lease lapsed in 2094. Considering the 68 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.