For anyone whose Norton property is held on a long lease, the message is clear – if you ignore the situation, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension.
It is generally considered that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Norton leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Alfie, came seriously near to the eighty-year threshold with the lease on his first floor flat in Norton. In buying his property 19 years previously, the length of the lease was of little importance. by good luck, he realised he needed to take action soon on a lease extension. Alfie extended the lease just under the wire last September. Alfie and the landlord who owned the flat above ultimately settled on a premium of £5,000 . If the lease had dipped to less than eighty years, the amount would have escalated by at least £1,025.
In 2009 we were approached by Dr Catherine Brooks who, having completed a studio apartment in Norton in August 1997. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparative homes in Norton with 100 year plus lease were in the region of £260,000. The average amount of ground rent was £50 billed per annum. The lease ran out in 2098. Given that there were 72 years remaining we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus fees.
In 2012 we were called by Mr Alex White who, having owned a ground floor flat in Norton in August 2009. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar residencies in Norton with a long lease were valued around £261,600. The average ground rent payable was £60 invoiced every twelve months. The lease elapsed in 2078. Considering the 52 years outstanding we estimated the compensation to the landlord to extend the lease to be between £39,000 and £45,000 not including expenses.