The re-sale value of a leasehold property in Streetly is impacted by how long the lease has remaining. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is ideal to start the lease extension process when the lease still has 82 years to run so that a lease extension can be finalised in advance of the eighty year cut off point. Current legislation entitles Streetly qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of 90 years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Streetly with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
Regardless of whether you are a tenant or a landlord in Streetly,the lease extension experts 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 Streetly valuers.
14 months ago Reuben, started to get close to the 80-year threshold with the lease on his two bedroom flat in Streetly. In buying his flat two decades ago, the length of the lease was of minimal significance. by good luck, he recognised he would imminently be paying way over the odds for Extending the lease. Reuben was able to extend his lease just under the wire last April. Reuben and the landlord subsequently settled on an amount of £5,000 . If he failed to meet the deadline, the price would have become more costly by a minimum £1,050.
In 2010 we were e-mailed by Ms D Johnson who, having acquired a one bedroom apartment in Streetly in January 2001. The question was if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Identical flats in Streetly with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 billed yearly. The lease lapsed on 13 September 2097. Taking into account 72 years left we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including professional charges.
Last Winter we were called by Mr Evan Thompson , who completed a one bedroom apartment in Streetly in November 2001. We are asked if we could approximate the price would be for a 90 year lease extension. Comparative homes in Streetly with 100 year plus lease were worth £233,200. The mid-range amount of ground rent was £60 billed every twelve months. The lease ended on 27 May 2086. Given that there were 61 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £22,800 and £26,400 not including costs.