Potswood leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Potswood residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Potswood you should see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for decades to come.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Potswood leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following protracted discussions with the landlord of her studio flat in Potswood, Alice commenced the lease extension process just as her lease was approaching the crucial eighty-year mark. The transaction was finalised in January 2010. The landlord’s fees were kept to an absolute minimum.
Ms O Morris took over the lease of a ground floor flat in Potswood in March 2001. The dilemma was if we could shed any light on how much (roughly) price would likely be to prolong the lease by 90 years. Similar homes in Potswood with a long lease were valued about £218,000. The mid-range amount of ground rent was £45 collected annually. The lease expiry date was in 2089. Considering the 63 years outstanding we calculated the premium to the freeholder to extend the lease to be within £17,100 and £19,800 not including costs.
Mrs R Rose moved into a basement flat in Potswood in November 2011. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Comparative properties in Potswood with a long lease were in the region of £265,000. The average amount of ground rent was £55 invoiced monthly. The lease ended on 24 March 2100. Given that there were 74 years remaining we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including legals.