The value of Upper Tean leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than 80 years
Leasehold premises in Upper Tean with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Upper Tean,the lease extension experts 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 Upper Tean valuers.
Off the back of protracted correspondence with the freeholder of her first floor apartment in Upper Tean, Eleanor initiated the lease extension process as the eighty year threshold was swiftly nearing. The legal work completed in August 2010. The landlord’s charges were kept to an absolute minimum.
In 2011 we were contacted by Dr W Martinez who, having moved into a first floor apartment in Upper Tean in October 2001. The dilemma was if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Comparative properties in Upper Tean with an extended lease were valued about £257,800. The average ground rent payable was £65 billed yearly. The lease elapsed in 2090. Given that there were 65 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 plus fees.
Last Christmas we were approach by Dr H Ricardo , who owned a one bedroom flat in Upper Tean in June 1995. We are asked if we could estimate the premium would likely be to prolong the lease by an additional years. Similar residencies in Upper Tean with a long lease were in the region of £196,400. The average amount of ground rent was £55 billed every twelve months. The lease ran out on 22 November 2079. Having 54 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £35,200 and £40,600 plus legals.