Yeovil leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. It is the case that most Yeovil tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Yeovil you must see if your lease has between 70 and ninety years remaining. There are good reasons why a Yeovil flat owner with a lease having around eighty years remaining should take action to ensure that a lease extension is effected without delay
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Yeovil,the lease extension solicitors 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 Yeovil valuers.
In recent months Riley, came perilously near to the 80-year mark with the lease on his basement apartment in Yeovil. In buying his flat twenty years ago, the unexpired term was of no interest. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Riley arranged for a lease extension just ahead of time last June. Riley and the freeholder in the end settled on the final figure of £5,000 . If he had missed the deadline, the sum would have increased by at least £1,100.
In 2013 we were phoned by Dr Ali Mitchell who, having moved into a basement apartment in Yeovil in September 2004. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar premises in Yeovil with 100 year plus lease were in the region of £261,600. The average amount of ground rent was £60 billed monthly. The lease lapsed in 2077. Taking into account 52 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £39,000 and £45,000 plus expenses.
In 2009 we were contacted by Mrs Holly Sánchez who, having bought a studio apartment in Yeovil in September 2003. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Similar homes in Yeovil with a long lease were valued around £218,000. The mid-range amount of ground rent was £45 billed yearly. The lease end date was in 2088. Given that there were 63 years left we calculated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 plus costs.