The value of Woodhouse and Handsworth 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 materialy once the remaining term is below than eighty years
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to 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. |
| Halifax | Minimum 70 years from the date 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. |
| 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 landlord in Woodhouse and Handsworth,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Woodhouse and Handsworth valuers.
Sam owned a conversion apartment in Woodhouse and Handsworth being sold with a lease of fraction over 61 years unexpired. Sam informally approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. Ordinarily, ground rent would not be due on a lease extension were Sam to exercise his statutory right. Sam procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
Last Winter we were called by Mr and Mrs. T Gray , who moved into a first floor flat in Woodhouse and Handsworth in March 2004. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparable homes in Woodhouse and Handsworth with an extended lease were worth £245,000. The mid-range ground rent payable was £50 billed yearly. The lease expired in 2094. Taking into account 68 years unexpired we calculated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus professional charges.
Last Spring we were contacted by Dr E Roux , who was assigned a lease of a newly refurbished flat in Woodhouse and Handsworth in May 2010. The question was if we could approximate the price could be for a ninety year lease extension. Similar flats in Woodhouse and Handsworth with a long lease were valued around £285,000. The average ground rent payable was £55 collected every twelve months. The lease ran out in 2105. Taking into account 79 years outstanding we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus fees.