Letchworth Garden City residential property held on a long lease is a wasting asset as the leaseholder merely owns the property for a period of years.
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Letchworth Garden City 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 lawyer we work with provide it.
Aaron was the the leasehold proprietor of a conversion apartment in Letchworth Garden City being sold with a lease of fraction over fifty eight years unexpired. Aaron informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Aaron to invoke his statutory right. Aaron obtained expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Last Summer we were approach by Dr Ellie Rodríguez , who acquired a basement flat in Letchworth Garden City in October 2008. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable properties in Letchworth Garden City with a long lease were valued about £176,200. The mid-range amount of ground rent was £65 invoiced annually. The lease finished on 17 October 2082. Given that there were 56 years left we calculated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 plus costs.
Dr J Stewart owned a purpose-built flat in Letchworth Garden City in September 2000. We are asked if we could approximate the price could be for a ninety year lease extension. Identical homes in Letchworth Garden City with an extended lease were worth £237,600. The average amount of ground rent was £45 billed yearly. The lease ran out on 13 July 2093. Considering the 67 years remaining we calculated the premium to the freeholder for the lease extension to be within £11,400 and £13,200 exclusive of costs.