Mundesley residential property owned on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the property will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Mundesley,the lease extension experts 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 Mundesley valuers.
Last October Blake, started to get close to the 80-year threshold with the lease on his studio apartment in Mundesley. Having purchased his flat 19 years ago, the lease term was of no relevance. As luck would have it, he realised he needed to take action soon on a lease extension. Blake was able to extend his lease just under the wire last March. Blake and the freeholder via the managing agents eventually agreed on an amount of £6,000 . If he not met the deadline, the price would have gone up by a minimum £925.
Last Summer we were called by Dr Caleb Khan , who completed a first floor apartment in Mundesley in January 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by 90 years. Identical homes in Mundesley with an extended lease were worth £193,400. The mid-range amount of ground rent was £65 collected quarterly. The lease expired in 2084. Considering the 59 years outstanding we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including legals.
Last Autumn we were e-mailed by Mr and Mrs. R Roberts , who acquired a basement flat in Mundesley in May 1999. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar residencies in Mundesley with a long lease were valued about £255,000. The average amount of ground rent was £50 billed annually. The lease termination date was on 10 July 2095. Taking into account 70 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £10,500 and £12,000 plus professional charges.