The re-sale value of a leasehold property in Yardley is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that formalities can be concluded ahead of the eighty year cut off point. Leasehold Reform legislation enables Yardley qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Yardley leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Oliver, came precariously near to the eighty-year mark with the lease on his leasehold flat in Yardley. In buying his home 19 years ago, the unexpired term was of no bearing. As luck would have it, he recognised he would imminently be paying an inflated amount for a lease extension. Oliver was able to extend his lease just under the wire in July. Oliver and the freeholder subsequently settled on the final figure of £5,500 . If the lease had dropped below 80 years, the amount would have escalated by at least £1,050.
In 2010 we were e-mailed by Mr and Mrs. P Hill who, having purchased a purpose-built flat in Yardley in March 2005. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Identical flats in Yardley with a long lease were worth £285,000. The mid-range ground rent payable was £45 invoiced per annum. The lease lapsed on 14 June 2097. Considering the 71 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of expenses.
In 2014 we were contacted by Mrs C Lambert who, having was assigned a lease of a purpose-built apartment in Yardley in February 2009. The dilemma was if we could approximate the price could be for a 90 year extension to my lease. Comparable properties in Yardley with 100 year plus lease were worth £230,800. The average ground rent payable was £60 billed yearly. The lease terminated on 14 October 2086. Given that there were 60 years unexpired we approximated the premium to the freeholder to extend the lease to be within £24,700 and £28,600 plus costs.