Mobberley 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 property with over one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Mobberley,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Mobberley valuers.
In recent months Ali, started to get near to the 80-year threshold with the lease on his garden flat in Mobberley. Having purchased his home two decades ago, the length of the lease was of minimal significance. by good luck, he realised he would imminently be paying way over the odds for Extending the lease. Ali was able to extend his lease at the eleventh hour in August. Ali and the landlord eventually settled on the final figure of £5,500 . If the lease had slipped to less than 80 years, the amount would have become more costly by at least £1,150.
In 2011 we were approached by Dr C Mitchell who, having acquired a basement flat in Mobberley in July 2012. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Mobberley with a long lease were valued about £206,200. The average ground rent payable was £55 billed quarterly. The lease termination date was in 2082. Having 56 years remaining we calculated the compensation to the landlord to extend the lease to be within £31,400 and £36,200 plus expenses.
In 2010 we were e-mailed by Dr Rosie Roberts who, having bought a first floor flat in Mobberley in June 1997. We are asked if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Comparable flats in Mobberley with a long lease were worth £300,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease ran out in 2102. Taking into account 76 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.