The market value of St Agnes leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is less than eighty years
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | 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. |
Retaining our service gives you enhanced control over the value of your St Agnes leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful negotiations with the landlord of her first floor apartment in St Agnes, Katie initiated the lease extension process just as the lease was nearing the all-important 80-year deadline. The lease extension completed in March 2010. The freeholder’s costs were kept to an absolute minimum.
Last year we were called by Ms Mollie Martinez , who took over the lease of a ground floor apartment in St Agnes in October 2009. The question was if we could approximate the premium would likely be to extend the lease by a further 90 years. Comparative flats in St Agnes with an extended lease were worth £183,600. The mid-range ground rent payable was £65 billed quarterly. The lease elapsed on 7 October 2082. Given that there were 57 years outstanding we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus professional charges.
Mrs C Lefèvre acquired a one bedroom flat in St Agnes in September 2000. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by a further 90 years. Identical premises in St Agnes with a long lease were valued around £245,000. The mid-range amount of ground rent was £50 invoiced annually. The lease finished on 8 January 2093. Considering the 68 years unexpired we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of costs.