The value of Manningtree leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the remaining term is less than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you better control over the value of your Manningtree leasehold, as your property will be more valuable and marketable in relation to the 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.
During the course of the last few months Logan, came dangerously near to the eighty-year mark with the lease on his ground floor apartment in Manningtree. In buying his flat two decades ago, the length of the lease was of little interest. Fortunately, it dawned on him that he would soon be paying an inflated amount for a lease extension. Logan extended the lease at the eleventh hour in July. Logan and the landlord eventually agreed on the final figure of £5,000 . If the lease had dropped to less than 80 years, the price would have gone up by a minimum £1,000.
Last Autumn we were phoned by Dr T Wilson , who owned a studio apartment in Manningtree in April 2008. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year lease extension. Similar residencies in Manningtree with an extended lease were worth £166,400. The mid-range ground rent payable was £60 invoiced yearly. The lease lapsed on 3 June 2079. Taking into account 54 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 plus expenses.
Last August we were contacted by Mr and Mrs. M François , who moved into a one bedroom flat in Manningtree in June 2010. The dilemma was if we could estimate the price could be to extend the lease by a further 90 years. Comparative residencies in Manningtree with 100 year plus lease were in the region of £227,800. The mid-range amount of ground rent was £45 collected every twelve months. The lease lapsed on 22 May 2090. Considering the 65 years left we estimated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 plus expenses.