The market value of Hurworth leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is below than eighty years
It is generally accepted that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Retaining our service gives you increased control over the value of your Hurworth leasehold, as your property will be more valuable and marketable in terms of lease length should you wish 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.
During the course of the last few months Dylan, came seriously close to the eighty-year threshold with the lease on his two bedroom flat in Hurworth. In buying his flat two decades ago, the unexpired term was of little importance. Thankfully, he recognised he would imminently be paying way over the odds for Extending the lease. Dylan was able to extend his lease just in the nick of time in September. Dylan and the freeholder in the end agreed on an amount of £6,000 . If the lease had dropped to less than eighty years, the sum would have escalated by at least £1,050.
Dr Poppy Young completed a first floor flat in Hurworth in April 2012. The dilemma was if we could approximate the premium would be for a ninety year extension to my lease. Similar flats in Hurworth with an extended lease were in the region of £242,600. The average amount of ground rent was £45 collected quarterly. The lease terminated in 2093. Having 67 years unexpired we estimated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus expenses.
Mr Aaron Taylor bought a first floor apartment in Hurworth in October 2001. We are asked if we could approximate the price would be to extend the lease by an additional years. Identical residencies in Hurworth with 100 year plus lease were valued about £280,000. The average ground rent payable was £55 invoiced yearly. The lease expired in 2104. Taking into account 78 years left we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 not including costs.