The market value of The Borough leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase substantially once the remaining term is less than eighty years
It is generally considered that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in The Borough can be a difficult process. We recommend you get professional help from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring The Borough lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Samuel was the the leasehold owner of a studio flat in The Borough being sold with a lease of fraction over 72 years remaining. Samuel on an informal basis contacted his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Samuel to exercise his statutory right. Samuel obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
Mrs Lauren Patel bought a one bedroom flat in The Borough in June 2002. The question was if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Similar homes in The Borough with an extended lease were valued around £203,200. The average amount of ground rent was £65 invoiced yearly. The lease expired in 2087. Having 61 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £19,000 and £22,000 plus professional charges.
In 2010 we were e-mailed by Mr and Mrs. T Bailey who, having was assigned a lease of a one bedroom apartment in The Borough in January 1995. We are asked if we could approximate the premium would be for a ninety year extension to my lease. Comparative homes in The Borough with a long lease were worth £260,000. The mid-range ground rent payable was £50 collected per annum. The lease termination date was on 15 January 2098. Taking into account 72 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus legals.