Sherston residential property owned on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
Leasehold residencies in Sherston with over one hundred years remaining 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 premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
The lawyers that we work with procure Sherston 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 conveyancing solicitor we work with provide it.
In 2014 Tommy, came dangerously near to the 80-year threshold with the lease on his one bedroom apartment in Sherston. Having purchased his home two decades ago, the lease term was of little relevance. As luck would have it, he realised he needed to take steps soon on a lease extension. Tommy extended the lease just under the wire in March. Tommy and the landlord who owned the flat above eventually settled on the final figure of £6,000 . If the lease had dipped to less than 80 years, the figure would have escalated by a minimum £1,050.
Dr U Gómez owned a purpose-built apartment in Sherston in September 2005. The dilemma was if we could approximate the compensation to the landlord would likely be to extend the lease by ninety years. Similar flats in Sherston with an extended lease were worth £235,200. The average amount of ground rent was £45 invoiced monthly. The lease concluded in 2091. Having 66 years outstanding we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus costs.
Last Winter we were phoned by Mrs I Hill , who took over the lease of a first floor apartment in Sherston in July 1997. The question was if we could approximate the price could be to prolong the lease by a further 90 years. Comparative residencies in Sherston with 100 year plus lease were valued around £275,000. The average amount of ground rent was £55 billed yearly. The lease lapsed on 8 January 2102. Considering the 77 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 not including expenses.