Virginia Water residential property owned on a long lease is a depreciating asset because a leaseholder only owns the property for a set term.
Leasehold premises in Virginia Water with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.
| 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 are not acceptable. 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; |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you enhanced control over the value of your Virginia Water leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing protracted correspondence with the landlord of her ground floor apartment in Virginia Water, Danielle initiated the lease extension process as the eighty year deadline was swiftly nearing. The lease extension completed in May 2005. The landlord’s costs were kept to an absolute minimum.
Last month we were phoned by Mr and Mrs. T Harris , who moved into a one bedroom apartment in Virginia Water in September 1999. We are asked if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Identical premises in Virginia Water with 100 year plus lease were valued about £280,000. The mid-range ground rent payable was £55 billed yearly. The lease lapsed in 2104. Considering the 78 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of costs.
In 2009 we were contacted by Dr Amber Bertrand who, having moved into a studio apartment in Virginia Water in April 2006. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Comparable premises in Virginia Water with an extended lease were worth £191,000. The average amount of ground rent was £65 invoiced monthly. The lease finished in 2084. Given that there were 58 years as a residual term we approximated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 exclusive of fees.