Thrapston residential property owned on a long lease is a wasting asset because a leaseholder only owns the property for a period of years.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 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 |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Thrapston,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Thrapston valuers.
Off the back of protracted correspondence with the freeholder of her garden flat in Thrapston, Grace started the lease extension process just as the lease was coming close to the all-important 80-year threshold. The lease extension was concluded in July 2012. The landlord’s charges were kept to an absolute minimum.
Last August we were e-mailed by Dr F Hernández , who acquired a studio flat in Thrapston in November 2004. We are asked if we could approximate the premium would likely be for a 90 year lease extension. Similar premises in Thrapston with a long lease were worth £208,200. The mid-range ground rent payable was £65 invoiced monthly. The lease expiry date was on 20 April 2086. Taking into account 61 years as a residual term we estimated the premium to the landlord for the lease extension to be between £20,000 and £23,000 exclusive of costs.
Mrs Y David completed a first floor apartment in Thrapston in October 2012. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Comparative flats in Thrapston with 100 year plus lease were worth £260,000. The average amount of ground rent was £50 invoiced quarterly. The lease ran out on 23 November 2097. Taking into account 72 years left we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.