Soham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. The majority of owners of residential leasehold property in Soham enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Soham you really ought to see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the compensation to the landlord for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Soham,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 in-depth market knowledge and the close ties they enjoy with Soham valuers.
Sam was the the leasehold owner of a high value flat in Soham being sold with a lease of a few days over 61 years unexpired. Sam on an informal basis contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be payable on a lease extension were Sam to invoke his statutory right. Sam procured expert legal guidance and secured satisfactory resolution informally and sell the property.
In 2009 we were e-mailed by Mr and Mrs. S James who, having was assigned a lease of a one bedroom apartment in Soham in May 2005. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Identical properties in Soham with an extended lease were worth £275,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease expired on 24 May 2103. Taking into account 77 years as a residual term we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of legals.
Last Autumn we were contacted by Mr and Mrs. F Evans , who moved into a newly refurbished apartment in Soham in May 1995. The question was if we could approximate the price could be for a 90 year lease extension. Identical residencies in Soham with an extended lease were worth £183,600. The mid-range ground rent payable was £65 billed monthly. The lease ended in 2083. Given that there were 57 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 plus fees.