Chances are that if you own a flat in New Farnley you actually own a long leasehold interest over your property
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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. |
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Using our service will provide you increased control over the value of your New Farnley leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Luke owned a high value flat in New Farnley on the market with a lease of just over 61 years outstanding. Luke on an informal basis approached his freeholder being a well known local-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and secured satisfactory resolution informally and sell the property.
Mr and Mrs. A Wilson purchased a ground floor flat in New Farnley in November 1998. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Comparable flats in New Farnley with an extended lease were in the region of £290,000. The average amount of ground rent was £60 invoiced per annum. The lease ended on 6 October 2106. Taking into account 80 years unexpired we calculated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including fees.
In 2010 we were approached by Mr Caleb Mitchell who, having completed a first floor flat in New Farnley in March 1996. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Similar residencies in New Farnley with a long lease were worth £200,800. The mid-range ground rent payable was £65 collected quarterly. The lease ran out in 2086. Having 60 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 not including fees.