The market value of a leasehold property in Howden is impacted by how long the lease has remaining. If it is near to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that formalities can be finalised ahead of the 80 year threshold. Current legislation enables Howden qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus a supplemental term of ninety years. The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Howden 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 conveyancing solicitor we work with provide it.
Half a year ago Liam, started to get near to the eighty-year mark with the lease on his first floor flat in Howden. Having purchased his home 19 years ago, the unexpired term was of minimal importance. Fortunately, he noticed he would soon be paying way over the odds for a lease extension. Liam arranged for a lease extension just in the nick of time in July. Liam and the landlord who owned the flat above ultimately agreed on sum of £6,000 . If he not met the deadline, the sum would have become more exhorbitant by at least £900.
In 2009 we were e-mailed by Dr I Davies who, having moved into a purpose-built flat in Howden in June 2001. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Identical properties in Howden with an extended lease were valued about £232,800. The mid-range amount of ground rent was £45 invoiced per annum. The lease lapsed on 14 May 2091. Having 65 years remaining we estimated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.
Mrs Sian Watson was assigned a lease of a recently refurbished flat in Howden in October 2004. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Similar flats in Howden with an extended lease were valued about £275,000. The average ground rent payable was £55 billed monthly. The lease concluded in 2102. Having 76 years remaining we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 not including expenses.