On the balance of probabilities where you own a flat in Petersfield you actually own a long leasehold interest over your property
Leasehold properties in Petersfield with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Petersfield,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Petersfield valuers.
David owned a 2 bedroom apartment in Petersfield on the market with a lease of just over fifty eight years unexpired. David informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were David to exercise his statutory right. David procured expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2013 we were contacted by Dr Kai Young who, having acquired a studio apartment in Petersfield in November 2001. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Identical flats in Petersfield with a long lease were worth £173,800. The mid-range amount of ground rent was £60 collected monthly. The lease ran out in 2080. Taking into account 55 years remaining we estimated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 exclusive of expenses.
Last Christmas we were e-mailed by Mr U Hall , who took over the lease of a purpose-built apartment in Petersfield in June 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Comparable premises in Petersfield with a long lease were in the region of £235,200. The average amount of ground rent was £45 billed yearly. The lease terminated on 10 May 2091. Considering the 66 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 not including professional charges.