Tooting residential property held on a long lease is a depreciating asset because a leaseholder merely owns the property for a set term.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Tooting,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tooting valuers.
Last October Benjamin, came precariously close to the 80-year threshold with the lease on his purpose- built apartment in Tooting. Having bought his home two decades ago, the lease term was of little interest. Thankfully, he realised he would imminently be paying way over the odds for a lease extension. Benjamin extended the lease at the eleventh hour in September. Benjamin and the landlord who owned the flat above subsequently settled on a premium of £5,500 . If the lease had fallen to less than eighty years, the amount would have escalated by a minimum £1,050.
Last Spring we were called by Mr and Mrs. P David , who moved into a studio flat in Tooting in May 1995. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Comparative flats in Tooting with a long lease were valued about £246,800. The average amount of ground rent was £60 collected monthly. The lease ran out on 14 September 2076. Having 50 years outstanding we approximated the premium to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Tooting residence is 14 Nutwell Street in January 2014. The premium payable for the acquisition of a new lease of the subject premises was in the sum of £30,523 This case affected 1 flat. The unexpired term as at the valuation date was 62.94 years.