Southmead leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Southmead enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Southmead you must see if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is generally considered that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Southmead,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 Southmead valuers.
Last year Jamie, started to get near to the eighty-year threshold with the lease on his one bedroom flat in Southmead. In buying his home 19 years ago, the length of the lease was of minimal significance. by good luck, he recognised he needed to take steps soon on Extending the lease. Jamie arranged for a lease extension just under the wire in September. Jamie and the freeholder eventually settled on the final figure of £5,500 . If the lease had dropped below eighty years, the sum would have become more costly by at least £1,000.
Dr Jude Robinson completed a one bedroom apartment in Southmead in February 2002. We are asked if we could approximate the price would be for a ninety year extension to my lease. Similar premises in Southmead with 100 year plus lease were in the region of £295,000. The mid-range ground rent payable was £45 collected quarterly. The lease ended on 1 July 2099. Given that there were 74 years unexpired we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 not including expenses.
In 2013 we were phoned by Mr and Mrs. P Rose who, having owned a ground floor apartment in Southmead in November 2008. The dilemma was if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Comparable homes in Southmead with a long lease were worth £248,000. The average amount of ground rent was £65 invoiced monthly. The lease elapsed in 2088. Given that there were 63 years remaining we estimated the premium to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of professional charges.