The market value of Writtle leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase materialy once the remaining term is below than 80 years
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Irrespective of whether you are a tenant or a freeholder in Writtle,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Writtle valuers.
Blake was the the leasehold proprietor of a 2 bedroom apartment in Writtle being sold with a lease of a little over 61 years remaining. Blake on an informal basis approached his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Blake to exercise his statutory right. Blake obtained expert legal guidance and secured an acceptable deal informally and readily saleable.
Last Spring we were contacted by Dr R Torres , who bought a garden apartment in Writtle in April 2004. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Identical properties in Writtle with an extended lease were worth £191,000. The average amount of ground rent was £65 billed annually. The lease terminated in 2084. Considering the 58 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £23,800 and £27,400 plus expenses.
In 2014 we were called by Mr and Mrs. S Bernard who, having purchased a studio apartment in Writtle in August 1995. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Similar residencies in Writtle with 100 year plus lease were worth £250,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease finished on 1 March 2095. Given that there were 69 years unexpired we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.