The market value of West Haddon leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in West Haddon,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 West Haddon valuers.
Jacob owned a 2 bedroom flat in West Haddon on the market with a lease of fraction over 59 years unexpired. Jacob informally contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 yearly. Ordinarily, ground rent would not be due on a lease extension were Jacob to exercise his statutory right. Jacob obtained expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last Autumn we were contacted by Mr and Mrs. U Jones , who completed a one bedroom flat in West Haddon in April 2010. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Comparable properties in West Haddon with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease terminated in 2097. Given that there were 71 years unexpired we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 plus professional charges.
Last Winter we were phoned by Dr L David , who owned a first floor apartment in West Haddon in February 1996. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Identical premises in West Haddon with a long lease were worth £225,800. The average ground rent payable was £60 collected quarterly. The lease finished on 22 January 2086. Given that there were 60 years left we approximated the premium to the freeholder for the lease extension to be between £23,800 and £27,400 not including professional charges.