The market value of Knowle leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase materialy once the unexpired lease term is less than eighty years
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Knowle,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Knowle valuers.
Two years ago Michael, came precariously near to the 80-year threshold with the lease on his basement flat in Knowle. Having purchased his home twenty years ago, the unexpired term was of minimal importance. Luckily, he became aware that he needed to take action soon on a lease extension. Michael was able to extend his lease at the eleventh hour in May. Michael and the freeholder subsequently settled on an amount of £5,500 . If he failed to meet the deadline, the figure would have increased by at least £1,125.
In 2012 we were approached by Mrs Molly Kelly who, having was assigned a lease of a basement apartment in Knowle in January 2004. We are asked if we could approximate the premium could be to extend the lease by 90 years. Similar homes in Knowle with an extended lease were valued around £280,000. The average amount of ground rent was £55 collected per annum. The lease concluded in 2104. Having 79 years left we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus fees.
In 2014 we were e-mailed by Mr O Wilson who, having moved into a studio flat in Knowle in January 2010. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable premises in Knowle with an extended lease were valued around £193,400. The average ground rent payable was £65 collected quarterly. The lease end date was on 19 August 2084. Taking into account 59 years remaining we calculated the premium to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of professional charges.