Red Lodge residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
Leasehold premises in Red Lodge with in excess of 100 years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date 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 |
Irrespective of whether you are a tenant or a freeholder in Red Lodge,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 experience and the close ties they enjoy with Red Lodge valuers.
Elijah owned a conversion flat in Red Lodge on the market with a lease of just over 59 years unexpired. Elijah informally approached his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Elijah to exercise his statutory right. Elijah obtained expert legal guidance and secured satisfactory resolution without resorting to tribunal and readily saleable.
Last year we were approach by Ms Anna Taylor , who bought a first floor flat in Red Lodge in January 2000. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Identical residencies in Red Lodge with an extended lease were in the region of £189,000. The average amount of ground rent was £55 collected yearly. The lease expired in 2078. Given that there were 53 years as a residual term we approximated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including costs.
Last Summer we were contacted by Mr and Mrs. O Howard , who completed a first floor flat in Red Lodge in June 2012. The dilemma was if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Similar homes in Red Lodge with an extended lease were worth £290,000. The average amount of ground rent was £45 collected every twelve months. The lease concluded on 19 November 2098. Considering the 73 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.