On the balance of probabilities where you own a flat in Oldland you actually own a long leasehold interest over your property
Leasehold properties in Oldland with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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:
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Engaging our service will provide you better control over the value of your Oldland leasehold, as your property will be more valuable and marketable 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.
Daniel owned a 2 bedroom apartment in Oldland on the market with a lease of a few days over 59 years unexpired. Daniel on an informal basis contacted his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were Daniel to exercise his statutory right. Daniel obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Mr Joshua Gunderson completed a ground floor apartment in Oldland in April 2001. The question was if we could approximate the price could be to extend the lease by 90 years. Identical properties in Oldland with a long lease were in the region of £198,800. The average amount of ground rent was £55 billed every twelve months. The lease elapsed in 2081. Having 55 years left we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including costs.
In 2009 we were called by Dr E Bertrand who, having took over the lease of a one bedroom flat in Oldland in January 2008. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar properties in Oldland with a long lease were valued around £295,000. The mid-range ground rent payable was £50 invoiced annually. The lease finished in 2101. Given that there were 75 years remaining we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including fees.