The value of Worksop 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 less than 80 years
Leasehold properties in Worksop with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing 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; |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you increased control over the value of your Worksop leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Finley owned a high value apartment in Worksop being sold with a lease of just over 72 years left. Finley on an informal basis contacted his landlord being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
In 2011 we were approached by Mr J Roberts who, having completed a first floor flat in Worksop in January 2007. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Identical premises in Worksop with a long lease were in the region of £235,200. The average ground rent payable was £45 invoiced per annum. The lease elapsed on 18 May 2092. Taking into account 66 years remaining we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus expenses.
In 2014 we were phoned by Mr and Mrs. S Gunderson who, having acquired a one bedroom apartment in Worksop in February 1998. The question was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable properties in Worksop with an extended lease were in the region of £280,000. The mid-range ground rent payable was £55 collected quarterly. The lease expired in 2103. Given that there were 77 years outstanding we calculated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 not including fees.