The market value of Prenton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than eighty years
Leasehold premises in Prenton with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with handle Prenton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
14 months ago Luke, started to get near to the 80-year threshold with the lease on his garden flat in Prenton. In buying his home 18 years previously, the length of the lease was of little concern. Thankfully, he recognised he needed to take steps soon on a lease extension. Luke was able to extend his lease at the eleventh hour last January. Luke and the landlord who owned the flat above subsequently agreed on the final figure of £5,000 . If he failed to meet the deadline, the premium would have gone up by a minimum £1,150.
Mr and Mrs. H Torres moved into a one bedroom flat in Prenton in June 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Similar homes in Prenton with an extended lease were in the region of £183,600. The average ground rent payable was £65 invoiced yearly. The lease lapsed in 2083. Taking into account 57 years remaining we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of legals.
In 2011 we were e-mailed by Ms Kelsey Moreau who, having took over the lease of a first floor flat in Prenton in June 1995. The question was if we could estimate the price would be to extend the lease by an additional years. Comparative homes in Prenton with 100 year plus lease were valued around £245,000. The mid-range amount of ground rent was £45 invoiced per annum. The lease elapsed on 15 January 2094. Taking into account 68 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus fees.