The market value of Narborough leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can escalate significantly once the remaining term is less than eighty years
Leasehold properties in Narborough with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with undertake Narborough lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Last October Oscar, started to get near to the eighty-year mark with the lease on his garden apartment in Narborough. In buying his property 19 years ago, the unexpired term was of no importance. by good luck, he became aware that he needed to take steps soon on Extending the lease. Oscar arranged for a lease extension at the eleventh hour last September. Oscar and the freeholder eventually settled on an amount of £6,000 . If he not met the deadline, the amount would have become more exhorbitant by at least £1,075.
Last Christmas we were e-mailed by Mr and Mrs. G Wright , who owned a first floor apartment in Narborough in January 2012. The dilemma was if we could shed any light on how much (roughly) price would be to extend the lease by ninety years. Similar residencies in Narborough with an extended lease were valued about £200,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease lapsed on 7 March 2104. Given that there were 78 years left we calculated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 plus expenses.
Dr Toby Cooper purchased a studio flat in Narborough in February 2011. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar properties in Narborough with a long lease were worth £267,600. The average ground rent payable was £65 collected every twelve months. The lease terminated in 2093. Taking into account 67 years remaining we estimated the compensation to the landlord to extend the lease to be between £14,300 and £16,400 not including professional charges.