The market value of Whalley Range leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you enhanced control over the value of your Whalley Range leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Spring Lucas, came dangerously close to the 80-year mark with the lease on his leasehold flat in Whalley Range. In buying his flat twenty years ago, the length of the lease was of minimal significance. Fortunately, he noticed he needed to take steps soon on Extending the lease. Lucas extended the lease at the eleventh hour last March. Lucas and the landlord subsequently settled on an amount of £5,000 . If he had missed the deadline, the amount would have escalated by at least £850.
Last year we were contacted by Dr S Morel , who completed a basement flat in Whalley Range in July 1999. We are asked if we could approximate the price would likely be to prolong the lease by an additional years. Comparative flats in Whalley Range with 100 year plus lease were in the region of £200,800. The average amount of ground rent was £65 billed per annum. The lease terminated on 24 January 2086. Taking into account 60 years outstanding we calculated the compensation to the landlord to extend the lease to be between £20,900 and £24,200 not including costs.
Last Autumn we were approach by Mr and Mrs. C Cook , who took over the lease of a first floor apartment in Whalley Range in August 2009. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be for a ninety year extension to my lease. Identical flats in Whalley Range with an extended lease were valued about £260,000. The average ground rent payable was £50 billed annually. The lease ran out in 2097. Considering the 71 years unexpired we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.