The value of Northampton 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 escalate materialy once the remaining term is less than eighty years
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as 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 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. |
| Coventry Building Society | 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. |
| 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. |
Using our service gives you increased control over the value of your Northampton leasehold, as your property will be more valuable and marketable in terms of lease length should you decide 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 Connor, came precariously near to the eighty-year mark with the lease on his ground floor apartment in Northampton. In buying his flat twenty years ago, the length of the lease was of no bearing. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Connor extended the lease just under the wire last January. Connor and the freeholder in the end settled on sum of £6,000 . If the lease had dropped to less than eighty years, the sum would have gone up by at least £1,000.
In 2011 we were called by Mr and Mrs. M Rogers who, having acquired a first floor flat in Northampton in January 2009. The question was if we could approximate the price would likely be to extend the lease by an additional years. Identical properties in Northampton with an extended lease were valued around £198,800. The mid-range ground rent payable was £55 invoiced yearly. The lease ended in 2081. Taking into account 55 years outstanding we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of fees.
Last Spring we were called by Dr J Smith , who moved into a first floor flat in Northampton in September 2011. The dilemma was if we could approximate the premium could be for a ninety year extension to my lease. Comparable flats in Northampton with 100 year plus lease were in the region of £300,000. The average ground rent payable was £50 billed per annum. The lease lapsed on 7 May 2101. Taking into account 75 years outstanding we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.