The value of Ironbridge 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 increase materialy once the remaining term is less than eighty years
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Ironbridge,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 Ironbridge valuers.
Subsequent to unsuccessful discussions with the landlord of her first floor flat in Ironbridge, Poppy started the lease extension process just as the lease was nearing the critical 80-year mark. The lease extension was finalised in April 2015. The freeholder’s costs were negotiated to below 550 GBP.
Last Spring we were e-mailed by Ms Molly Laurent , who took over the lease of a one bedroom apartment in Ironbridge in April 2002. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparable flats in Ironbridge with an extended lease were in the region of £255,000. The average amount of ground rent was £50 collected monthly. The lease lapsed on 17 July 2095. Taking into account 70 years outstanding we calculated the premium to the freeholder to extend the lease to be within £10,500 and £12,000 not including fees.
Last month we were called by Dr B Young , who owned a first floor apartment in Ironbridge in November 2008. The question was if we could estimate the price would be to extend the lease by 90 years. Comparable flats in Ironbridge with an extended lease were valued around £246,800. The average ground rent payable was £60 billed quarterly. The lease finished in 2075. Considering the 50 years as a residual term we calculated the premium to the landlord to extend the lease to be between £44,700 and £51,600 exclusive of fees.