For anyone whose Lynmouth flat is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to extend the lease.
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| 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. |
| 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. |
Using our service gives you increased control over the value of your Lynmouth leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Alex, started to get close to the eighty-year mark with the lease on his purpose- built flat in Lynmouth. Having purchased his home two decades ago, the length of the lease was of little relevance. Luckily, he noticed he would imminently be paying way over the odds for a lease extension. Alex arranged for a lease extension just ahead of time last June. Alex and the landlord who owned the flat above in the end settled on sum of £6,000 . If he failed to meet the deadline, the amount would have escalated by a minimum £925.
Last Autumn we were approach by Mrs Rosie Adams , who moved into a recently refurbished flat in Lynmouth in July 2004. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Identical flats in Lynmouth with an extended lease were in the region of £264,000. The average amount of ground rent was £60 collected every twelve months. The lease elapsed in 2079. Taking into account 53 years outstanding we calculated the premium to the landlord for the lease extension to be within £37,100 and £42,800 exclusive of fees.
Last Winter we were phoned by Mr and Mrs. L Morel , who completed a purpose-built flat in Lynmouth in January 2004. The question was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Identical homes in Lynmouth with an extended lease were in the region of £220,400. The mid-range amount of ground rent was £45 billed every twelve months. The lease ended on 6 January 2090. Considering the 64 years remaining we estimated the premium to the landlord for the lease extension to be within £15,200 and £17,600 plus costs.