Peak District residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with handle Peak District lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
In recent months Edward, came precariously close to the 80-year threshold with the lease on his first floor apartment in Peak District. In buying his home 18 years previously, the length of the lease was of little significance. Thankfully, he recognised he needed to take action soon on a lease extension. Edward was able to extend his lease at the eleventh hour in September. Edward and the landlord ultimately settled on the final figure of £5,500 . If the lease had gone to less than 80 years, the sum would have become more costly by a minimum £1,150.
Last month we were e-mailed by Mr L Fournier , who bought a one bedroom flat in Peak District in November 1997. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable homes in Peak District with an extended lease were valued around £264,000. The average amount of ground rent was £60 billed monthly. The lease expired on 13 March 2077. Given that there were 53 years as a residual term we approximated the premium to the landlord to extend the lease to be within £37,100 and £42,800 not including fees.
Mr Alfie Adams owned a basement apartment in Peak District in April 2002. The question was if we could estimate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar homes in Peak District with 100 year plus lease were in the region of £220,400. The mid-range ground rent payable was £45 collected every twelve months. The lease finished on 1 July 2088. Having 64 years unexpired we estimated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 plus professional charges.