The value of New Covent Garden leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate materialy once the remaining term is below than eighty years
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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 | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your New Covent Garden leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Oscar, came perilously close to the 80-year mark with the lease on his one bedroom apartment in New Covent Garden. In buying his property two decades ago, the unexpired term was of no significance. Luckily, he became aware that he needed to take action soon on Extending the lease. Oscar was able to extend his lease just under the wire last April. Oscar and the landlord subsequently agreed on sum of £5,500 . If the lease had dropped below 80 years, the sum would have become more costly by at least £1,075.
In 2013 we were called by Mr B Smith who, having purchased a purpose-built flat in New Covent Garden in November 2007. The dilemma was if we could estimate the price would be to extend the lease by 90 years. Similar premises in New Covent Garden with 100 year plus lease were worth £173,800. The average ground rent payable was £60 invoiced quarterly. The lease finished on 8 June 2081. Considering the 55 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 not including expenses.
In 2013 we were approached by Ms Grace Ali who, having moved into a one bedroom flat in New Covent Garden in July 2012. The question was if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Identical residencies in New Covent Garden with a long lease were in the region of £235,200. The mid-range amount of ground rent was £45 billed annually. The lease lapsed on 21 May 2092. Given that there were 66 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.