The market value of Washington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the unexpired lease term is less than 80 years
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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 |
Regardless of whether you are a tenant or a freeholder in Washington,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Washington valuers.
18 months ago Jason, started to get close to the 80-year mark with the lease on his basement flat in Washington. In buying his flat twenty years ago, the lease term was of no importance. Luckily, it dawned on him that he needed to take action soon on a lease extension. Jason was able to extend his lease at the eleventh hour in July. Jason and the freeholder in the end settled on an amount of £5,500 . If the lease had slipped below eighty years, the amount would have gone up by a minimum £1,025.
In 2009 we were called by Dr Mollie Flores who, having was assigned a lease of a studio flat in Washington in April 1997. The dilemma was if we could estimate the price could be to prolong the lease by 90 years. Similar residencies in Washington with a long lease were in the region of £223,400. The average amount of ground rent was £60 billed yearly. The lease finished on 15 March 2085. Considering the 59 years outstanding we approximated the compensation to the landlord for the lease extension to be between £27,600 and £31,800 not including fees.
In 2011 we were approached by Dr Y Flores who, having bought a one bedroom flat in Washington in January 2007. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable residencies in Washington with 100 year plus lease were valued around £205,000. The average ground rent payable was £50 collected quarterly. The lease came to a finish in 2105. Given that there were 79 years as a residual term we calculated the premium to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of legals.