Lound leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Lound enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Lound you really ought to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Lound with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Lound leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Ben owned a high value flat in Lound being sold with a lease of fraction over 59 years remaining. Ben on an informal basis approached his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £50 yearly. No ground rent would be due on a lease extension were Ben to exercise his statutory right. Ben procured expert legal guidance and secured an acceptable deal informally and ending up with a market value flat.
Last Winter we were called by Mr and Mrs. U Gunderson , who bought a newly refurbished flat in Lound in April 2000. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Comparative premises in Lound with 100 year plus lease were in the region of £200,800. The mid-range ground rent payable was £65 billed yearly. The lease termination date was in 2086. Given that there were 60 years as a residual term we calculated the premium to the landlord for the lease extension to be between £20,900 and £24,200 plus costs.
In 2014 we were contacted by Mr and Mrs. U Brooks who, having acquired a one bedroom flat in Lound in November 2006. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparative homes in Lound with 100 year plus lease were worth £255,000. The average ground rent payable was £50 billed per annum. The lease elapsed in 2097. Taking into account 71 years as a residual term we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.