It’s a harsh certainty that a Pershore residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Pershore property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be due. Most flat owners in Pershore will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Using our service gives you enhanced control over the value of your Pershore leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Henry was the the leasehold proprietor of a 2 bedroom flat in Pershore being marketed with a lease of a few days over sixty years remaining. Henry informally approached his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £50 yearly. No ground rent would be due on a lease extension were Henry to invoke his statutory right. Henry obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Mr Jayden Rogers bought a first floor flat in Pershore in November 1997. The question was if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Similar premises in Pershore with an extended lease were worth £208,200. The mid-range amount of ground rent was £65 collected per annum. The lease lapsed on 27 June 2087. Considering the 61 years left we approximated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of expenses.
Last Christmas we were approach by Dr J Bennett , who moved into a garden apartment in Pershore in April 2006. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by 90 years. Comparative residencies in Pershore with an extended lease were valued around £260,000. The average amount of ground rent was £50 billed annually. The lease terminated on 4 August 2098. Considering the 72 years remaining we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.