The market value of Streetly leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the unexpired lease term is less than 80 years
It is generally accepted that a property with more than 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you better control over the value of your Streetly leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Zachary was the the leasehold proprietor of a high value flat in Streetly being marketed with a lease of fraction over 72 years unexpired. Zachary informally spoke with his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Zachary to exercise his statutory right. Zachary obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
In 2010 we were e-mailed by Mr and Mrs. T Turner who, having acquired a one bedroom apartment in Streetly in July 1996. We are asked if we could estimate the premium would be for a 90 year extension to my lease. Comparative homes in Streetly with an extended lease were worth £216,000. The average ground rent payable was £60 invoiced every twelve months. The lease terminated in 2084. Having 58 years unexpired we estimated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including professional charges.
Last Autumn we were phoned by Mrs G Parker , who was assigned a lease of a one bedroom flat in Streetly in September 2011. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparative properties in Streetly with a long lease were valued about £200,000. The mid-range amount of ground rent was £50 billed annually. The lease finished in 2104. Taking into account 78 years remaining we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of fees.