Yarmouth residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a set term.
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 further ninety years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with handle Yarmouth lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
In 2014 Andrew, started to get near to the eighty-year threshold with the lease on his basement flat in Yarmouth. In buying his property two decades ago, the unexpired term was of no relevance. As luck would have it, he recognised he would soon be paying an escalated premium for a lease extension. Andrew arranged for a lease extension just under the wire last September. Andrew and the landlord eventually settled on a premium of £6,000 . If he not met the deadline, the sum would have become more exhorbitant by a minimum £850.
In 2013 we were contacted by Dr J Ramírez who, having was assigned a lease of a one bedroom apartment in Yarmouth in September 1997. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparable residencies in Yarmouth with an extended lease were in the region of £166,800. The average ground rent payable was £50 invoiced annually. The lease finished on 6 September 2075. Considering the 50 years remaining we calculated the premium to the landlord for the lease extension to be within £32,300 and £37,400 plus fees.
Last month we were called by Mr and Mrs. F Phillips , who took over the lease of a newly refurbished flat in Yarmouth in January 2011. The dilemma was if we could estimate the premium could be to extend the lease by an additional years. Comparable properties in Yarmouth with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £45 invoiced yearly. The lease finished in 2095. Given that there were 70 years remaining we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 not including fees.