The value of Needham Market 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 materialy once the remaining term is less than 80 years
Leasehold residencies in Needham Market with in excess of one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with handle Needham Market 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.
Harvey was the the leasehold proprietor of a high value apartment in Needham Market on the market with a lease of fraction over 72 years outstanding. Harvey informally approached his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Harvey to exercise his statutory right. Harvey procured expert advice and secured an acceptable resolution informally and readily saleable.
In 2012 we were phoned by Mr and Mrs. R Dupont who, having took over the lease of a studio apartment in Needham Market in November 2006. The question was if we could approximate the price could be to extend the lease by a further 90 years. Comparable residencies in Needham Market with an extended lease were in the region of £233,200. The mid-range amount of ground rent was £60 collected every twelve months. The lease finished in 2086. Having 61 years unexpired we estimated the premium to the freeholder for the lease extension to be within £22,800 and £26,400 plus expenses.
Last Autumn we were e-mailed by Dr Isabel Green , who was assigned a lease of a garden flat in Needham Market in March 2009. We are asked if we could approximate the price could be for a 90 year extension to my lease. Comparable homes in Needham Market with a long lease were in the region of £171,800. The average ground rent payable was £55 invoiced quarterly. The lease finished in 2075. Given that there were 50 years outstanding we estimated the premium to the freeholder to extend the lease to be within £33,300 and £38,400 plus expenses.