The market value of Winterbourne 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 escalate substantially once the remaining term is less than 80 years
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Winterbourne,the lease extension experts 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 Winterbourne valuers.
Aaron was the the leasehold proprietor of a studio apartment in Winterbourne being sold with a lease of a few days over fifty eight years remaining. Aaron informally spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Aaron to invoke his statutory right. Aaron obtained expert advice and secured an acceptable deal informally and sell the property.
In 2009 we were phoned by Mr and Mrs. O Lee who, having moved into a first floor flat in Winterbourne in May 2008. We are asked if we could estimate the price would likely be to extend the lease by a further 90 years. Identical homes in Winterbourne with an extended lease were valued around £295,000. The average ground rent payable was £45 invoiced yearly. The lease terminated in 2100. Considering the 74 years remaining we estimated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.
In 2011 we were phoned by Mr W Harris who, having bought a recently refurbished flat in Winterbourne in February 1999. The question was if we could approximate the premium could be for a ninety year lease extension. Identical properties in Winterbourne with 100 year plus lease were worth £243,000. The mid-range ground rent payable was £65 invoiced monthly. The lease terminated in 2089. Having 63 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 exclusive of costs.