For those whose Ponteland home is held on a long lease, the message is clear – if nothing is done, the property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
It is generally considered that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Ponteland,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ponteland valuers.
Half a year ago William, started to get near to the eighty-year mark with the lease on his first floor apartment in Ponteland. Having bought his home 18 years ago, the unexpired term was of little significance. Luckily, it dawned on him that he needed to take action soon on Extending the lease. William arranged for a lease extension at the eleventh hour in January. William and the freeholder via the managing agents ultimately agreed on the final figure of £6,000 . If he had missed the deadline, the premium would have escalated by at least £1,050.
Dr R Lee purchased a one bedroom apartment in Ponteland in January 1995. We are asked if we could estimate the compensation to the landlord could be to extend the lease by ninety years. Comparable flats in Ponteland with a long lease were worth £280,000. The average amount of ground rent was £45 invoiced quarterly. The lease ended in 2094. Given that there were 69 years unexpired we estimated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 plus fees.
Last Autumn we were phoned by Mr and Mrs. R Morgan , who acquired a studio flat in Ponteland in August 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparative properties in Ponteland with 100 year plus lease were in the region of £216,000. The average amount of ground rent was £60 invoiced every twelve months. The lease lapsed in 2083. Given that there were 58 years left we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 exclusive of fees.