The market value of Whitefield 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 increase substantially once the unexpired lease term is below than 80 years
Leasehold premises in Whitefield with more than 100 years remaining 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 home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Retaining our service gives you enhanced control over the value of your Whitefield leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Ollie, started to get near to the 80-year threshold with the lease on his basement flat in Whitefield. In buying his property 18 years ago, the length of the lease was of minimal bearing. Fortunately, he noticed he needed to take action soon on Extending the lease. Ollie extended the lease just in the nick of time in May. Ollie and the freeholder via the management company subsequently agreed on an amount of £6,000 . If the lease had gone below eighty years, the price would have escalated by a minimum £1,075.
Last month we were phoned by Mr and Mrs. Y Lefebvre , who moved into a one bedroom flat in Whitefield in February 2011. The dilemma was if we could shed any light on how much (roughly) price would be to prolong the lease by 90 years. Comparable residencies in Whitefield with 100 year plus lease were worth £205,000. The average amount of ground rent was £50 invoiced every twelve months. The lease expired on 28 November 2105. Given that there were 79 years outstanding we calculated the compensation to the landlord to extend the lease to be within £7,600 and £8,800 not including legals.
Last November we were contacted by Mr and Mrs. S Rivera , who owned a studio flat in Whitefield in July 2007. We are asked if we could approximate the price could be to extend the lease by ninety years. Identical residencies in Whitefield with an extended lease were in the region of £270,000. The mid-range ground rent payable was £65 collected yearly. The lease expiry date was on 25 June 2094. Considering the 68 years unexpired we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of costs.