The market value of Kirkby Lonsdale leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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 increased control over the value of your Kirkby Lonsdale leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Nathaniel owned a studio apartment in Kirkby Lonsdale being marketed with a lease of fraction over fifty eight years remaining. Nathaniel on an informal basis spoke with his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were Nathaniel to invoke his statutory right. Nathaniel procured expert legal guidance and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2014 we were e-mailed by Mr Logan Torres who, having moved into a first floor flat in Kirkby Lonsdale in October 2010. We are asked if we could approximate the premium would be to prolong the lease by an additional years. Similar premises in Kirkby Lonsdale with an extended lease were worth £255,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease lapsed in 2095. Having 70 years unexpired we estimated the premium to the landlord to extend the lease to be between £10,500 and £12,000 plus fees.
In 2012 we were e-mailed by Mr and Mrs. D Leroy who, having purchased a one bedroom flat in Kirkby Lonsdale in March 2000. The dilemma was if we could shed any light on how much (approximately) price would be to prolong the lease by ninety years. Similar flats in Kirkby Lonsdale with an extended lease were valued around £246,800. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease terminated on 28 September 2075. Having 50 years left we calculated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of costs.