The value of Southwater leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is less than 80 years
It is conventional wisdom that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to 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 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Lease extensions in Southwater can be a difficult process. We recommend you secure guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Southwater lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Half a year ago Jasper, came critically near to the eighty-year mark with the lease on his studio apartment in Southwater. In buying his property twenty years previously, the length of the lease was of little concern. Thankfully, it dawned on him that he needed to take action soon on Extending the lease. Jasper extended the lease at the eleventh hour last July. Jasper and the landlord who owned the flat above ultimately settled on an amount of £6,000 . If he failed to meet the deadline, the premium would have increased by at least £875.
Dr Lydia Morgan was assigned a lease of a newly refurbished flat in Southwater in November 2009. The question was if we could estimate the compensation to the landlord could be to extend the lease by a further 90 years. Identical homes in Southwater with an extended lease were worth £174,200. The mid-range ground rent payable was £55 billed annually. The lease concluded in 2076. Considering the 51 years remaining we calculated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 plus professional charges.
Last month we were contacted by Dr P Lefebvre , who purchased a one bedroom flat in Southwater in October 2002. The question was if we could estimate the price would likely be to extend the lease by 90 years. Identical residencies in Southwater with an extended lease were valued around £285,000. The average ground rent payable was £45 billed annually. The lease ended on 6 April 2096. Taking into account 71 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including professional charges.