The market value of a leasehold property in Springwell depends on how long the lease has left to run. If it is close to or less than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. Ideally one should start the lease extension process when the lease still has 82 years remaining so that all matters can be concluded in advance of the eighty year cut off point. Statute enables Springwell qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Springwell with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Springwell,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Springwell valuers.
William owned a studio flat in Springwell on the market with a lease of just over fifty eight years outstanding. William on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 per annum. No ground rent would be payable on a lease extension were William to invoke his statutory right. William procured expert legal guidance and secured satisfactory deal without going to tribunal and readily saleable.
Mr and Mrs. I Carter was assigned a lease of a one bedroom apartment in Springwell in October 2007. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Comparable premises in Springwell with 100 year plus lease were valued around £176,200. The mid-range ground rent payable was £65 billed per annum. The lease concluded in 2082. Taking into account 56 years outstanding we calculated the premium to the freeholder for the lease extension to be within £29,500 and £34,000 not including legals.
Dr P Green was assigned a lease of a first floor flat in Springwell in March 2004. The dilemma was if we could estimate the premium would be for a ninety year lease extension. Comparative premises in Springwell with a long lease were in the region of £242,600. The mid-range ground rent payable was £45 billed yearly. The lease concluded on 21 February 2093. Considering the 67 years left we calculated the premium to the landlord for the lease extension to be within £11,400 and £13,200 plus legals.