Kirkheaton residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a period of years.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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. |
The conveyancing solicitors that we work with procure Kirkheaton 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 conveyancer we work with provide it.
Hunter was the the leasehold proprietor of a conversion apartment in Kirkheaton on the market with a lease of a little over 61 years outstanding. Hunter on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Hunter to exercise his statutory right. Hunter procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Mrs I Bell completed a garden apartment in Kirkheaton in November 1997. We are asked if we could estimate the price would likely be to extend the lease by 90 years. Comparative residencies in Kirkheaton with 100 year plus lease were valued about £235,200. The average amount of ground rent was £45 billed quarterly. The lease elapsed in 2091. Given that there were 66 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 not including professional charges.
In 2011 we were called by Mr and Mrs. U Green who, having bought a purpose-built flat in Kirkheaton in January 2005. The dilemma was if we could estimate the premium would likely be to extend the lease by an additional years. Comparative properties in Kirkheaton with 100 year plus lease were valued around £275,000. The average amount of ground rent was £55 billed monthly. The lease terminated in 2102. Given that there were 77 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of expenses.