On the balance of probabilities where you own a flat in Potton you actually own a long leasehold interest over your property
It is generally accepted that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Potton leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of unsuccessful discussions with the freeholder of her leasehold apartment in Potton, Emily started the lease extension process as the 80 year threshold was swiftly approaching. The lease extension was finalised in May 2013. The landlord’s charges were kept to an absolute minimum.
In 2010 we were approached by Mr and Mrs. N Bertrand who, having acquired a recently refurbished flat in Potton in May 2007. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Identical flats in Potton with an extended lease were valued about £223,400. The mid-range amount of ground rent was £60 collected per annum. The lease expired in 2084. Taking into account 59 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 exclusive of professional charges.
In 2010 we were contacted by Mr Ollie Hall who, having bought a one bedroom flat in Potton in January 2005. We are asked if we could approximate the price would likely be to extend the lease by 90 years. Comparative homes in Potton with a long lease were in the region of £205,000. The mid-range ground rent payable was £50 collected every twelve months. The lease terminated in 2104. Considering the 79 years remaining we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.