Summertown and Botley residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
It is generally considered that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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 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; |
| Godiva Mortgages | 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Summertown and Botley,the lease extension solicitors 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 Summertown and Botley valuers.
John owned a 2 bedroom flat in Summertown and Botley being marketed with a lease of a little over sixty years remaining. John informally approached his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were John to invoke his statutory right. John obtained expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Last Christmas we were phoned by Mr P Bennett , who owned a garden flat in Summertown and Botley in September 1999. The dilemma was if we could approximate the price would likely be to extend the lease by an additional years. Identical properties in Summertown and Botley with 100 year plus lease were worth £186,000. The mid-range ground rent payable was £65 billed every twelve months. The lease elapsed on 6 September 2083. Taking into account 58 years outstanding we estimated the premium to the landlord to extend the lease to be within £23,800 and £27,400 plus professional charges.
In 2012 we were e-mailed by Mr Callum François who, having bought a ground floor apartment in Summertown and Botley in October 2004. We are asked if we could estimate the premium would be to prolong the lease by an additional years. Comparable properties in Summertown and Botley with 100 year plus lease were worth £250,000. The average ground rent payable was £50 invoiced per annum. The lease termination date was on 4 January 2094. Given that there were 69 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.