The market value of Northleach 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 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years in the future.
| 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before 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. |
Lease extensions in Northleach can be a difficult process. We recommend you secure professional help from a lawyer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Northleach lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Alex, started to get close to the 80-year threshold with the lease on his studio flat in Northleach. Having bought his flat 18 years ago, the unexpired term was of minimal relevance. Luckily, he became aware that he would soon be paying an escalated premium for a lease extension. Alex arranged for a lease extension at the eleventh hour in January. Alex and the landlord who owned the flat above eventually settled on a premium of £5,000 . If the lease had dipped below 80 years, the price would have gone up by a minimum £925.
Dr Rory King owned a one bedroom apartment in Northleach in November 2007. We are asked if we could shed any light on how much (approximately) price could be for a 90 year extension to my lease. Similar residencies in Northleach with an extended lease were worth £233,200. The mid-range amount of ground rent was £60 invoiced annually. The lease concluded in 2086. Having 61 years outstanding we approximated the premium to the landlord to extend the lease to be between £22,800 and £26,400 not including fees.
Mr and Mrs. A Clarke bought a purpose-built flat in Northleach in April 2009. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparable flats in Northleach with a long lease were worth £166,800. The mid-range ground rent payable was £50 billed every twelve months. The lease elapsed on 10 November 2075. Taking into account 50 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 exclusive of fees.