Spalding leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Most owners of residential leasehold property in Spalding enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Spalding you must see if your lease has between 70 and 90 years remaining. There are compelling reasons why a Spalding leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is effected without delay
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Engaging our service gives you enhanced control over the value of your Spalding leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year John, started to get near to the 80-year threshold with the lease on his basement flat in Spalding. Having purchased his flat two decades ago, the length of the lease was of little relevance. As luck would have it, he became aware that he would soon be paying way over the odds for a lease extension. John was able to extend his lease just ahead of time in April. John and the freeholder in the end settled on an amount of £5,500 . If the lease had fallen lower than 80 years, the figure would have escalated by at least £925.
In 2009 we were contacted by Mrs Eleanor Khan who, having completed a garden apartment in Spalding in April 1997. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparable homes in Spalding with a long lease were worth £290,000. The mid-range amount of ground rent was £45 billed quarterly. The lease concluded in 2099. Having 73 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of legals.
Last year we were phoned by Mr and Mrs. P Scott , who completed a studio flat in Spalding in June 2010. The question was if we could shed any light on how much (roughly) premium could be for a 90 year extension to my lease. Comparative residencies in Spalding with an extended lease were valued about £240,600. The average amount of ground rent was £60 invoiced every twelve months. The lease came to a finish on 1 July 2088. Considering the 62 years remaining we estimated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 not including professional charges.