The market value of a leasehold property in Saltash depends on how many years the lease has remaining. If it is near to or less than 80 years you should anticipate difficulties on re-sale, so it is recommended to arrange for a lease extension prior to purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years unexpired so that a lease extension can be concluded in advance of the eighty year cut off point. Leasehold Reform legislation enables Saltash qualifying lessees to a ninety year extension added to their remaining lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea Building Society | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Saltash leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Arthur, started to get near to the eighty-year threshold with the lease on his ground floor flat in Saltash. In buying his property two decades ago, the unexpired term was of minimal concern. As luck would have it, he became aware that he would imminently be paying an escalated premium for a lease extension. Arthur extended the lease just ahead of time in April. Arthur and the landlord ultimately agreed on sum of £5,000 . If the lease had slipped lower than 80 years, the sum would have escalated by at least £1,125.
In 2014 we were phoned by Dr Adam Phillips who, having moved into a one bedroom apartment in Saltash in July 2004. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Saltash with 100 year plus lease were worth £280,000. The average ground rent payable was £45 invoiced quarterly. The lease expiry date was in 2096. Given that there were 70 years outstanding we approximated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus legals.
Mrs H González took over the lease of a basement apartment in Saltash in May 2007. The question was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Similar residencies in Saltash with an extended lease were worth £218,400. The mid-range amount of ground rent was £60 billed every twelve months. The lease came to a finish on 22 March 2085. Given that there were 59 years unexpired we approximated the compensation to the landlord to extend the lease to be between £27,600 and £31,800 exclusive of professional charges.