The market value of Peterborough leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase substantially once the remaining term is less than 80 years
Leasehold properties in Peterborough with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 Peterborough leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aiden owned a high value flat in Peterborough being sold with a lease of a few days over sixty years left. Aiden informally spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 per annum. Ordinarily, ground rent would not be payable on a lease extension were Aiden to exercise his statutory right. Aiden procured expert advice and secured satisfactory resolution without going to tribunal and sell the property.
Mrs T Díaz moved into a one bedroom apartment in Peterborough in September 2001. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical flats in Peterborough with 100 year plus lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced quarterly. The lease termination date was on 15 July 2101. Taking into account 75 years remaining we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.
Mr Hunter Lefebvre moved into a garden apartment in Peterborough in November 2010. The question was if we could estimate the premium would likely be for a 90 year lease extension. Similar flats in Peterborough with a long lease were valued about £173,800. The average amount of ground rent was £65 billed annually. The lease finished in 2081. Considering the 55 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 exclusive of costs.