Redland residential property owned on a long lease is a wasting asset as the leaseholder only owns the property for a period of years.
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years left, the property will be worth the same as 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Redland,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Redland valuers.
Ollie was the the leasehold proprietor of a studio flat in Redland on the market with a lease of a little over sixty years outstanding. Ollie on an informal basis contacted his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Ollie to exercise his statutory right. Ollie procured expert legal guidance and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2014 we were approached by Dr Y Lambert who, having bought a garden apartment in Redland in August 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year extension to my lease. Similar homes in Redland with a long lease were valued around £237,600. The mid-range ground rent payable was £45 collected per annum. The lease concluded on 17 September 2093. Taking into account 67 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £11,400 and £13,200 not including fees.
In 2013 we were called by Ms L Bernard who, having was assigned a lease of a one bedroom apartment in Redland in September 2005. We are asked if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparative flats in Redland with 100 year plus lease were in the region of £280,000. The average ground rent payable was £55 collected per annum. The lease elapsed in 2104. Taking into account 78 years left we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 not including expenses.