The rule of thumb is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Leyland may extend the lease for a further 90 years under statute. Do think carefully before delaying your Leyland lease extension. Postponing that expense now simply increases the premium you will eventually be required to pay for a lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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;
|Leeds Building Society
|85 years remaining from the start of the mortgage.
|National Westminster Bank
|Mortgage term plus 30 years.
| 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
Retaining our service will provide you better control over the value of your Leyland leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Oliver, started to get near to the 80-year threshold with the lease on his garden apartment in Leyland. Having bought his flat twenty years previously, the length of the lease was of minimal concern. Thankfully, it dawned on him that he would soon be paying way over the odds for Extending the lease. Oliver extended the lease at the eleventh hour in July. Oliver and the landlord who owned the flat above eventually settled on an amount of £5,000 . If the lease had gone lower than 80 years, the price would have increased by a minimum £925.
Dr R Thompson purchased a garden flat in Leyland in May 2012. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable flats in Leyland with a long lease were worth £166,800. The average ground rent payable was £50 invoiced annually. The lease ran out on 26 October 2074. Having 50 years outstanding we approximated the premium to the landlord to extend the lease to be within £32,300 and £37,400 plus costs.
Last Christmas we were phoned by Mr and Mrs. I García , who owned a ground floor flat in Leyland in October 2010. We are asked if we could estimate the price would be to extend the lease by ninety years. Comparable premises in Leyland with a long lease were worth £280,000. The average ground rent payable was £45 collected monthly. The lease came to a finish in 2094. Taking into account 70 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including fees.