The market value of Yeovil 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 eighty years
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you increased control over the value of your Yeovil leasehold, as your property will be more valuable and saleable in relation to the lease length should you want 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.
Austin was the the leasehold proprietor of a high value apartment in Yeovil being marketed with a lease of a little over sixty years outstanding. Austin informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Austin to invoke his statutory right. Austin obtained expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Last month we were called by Mrs Harriet Bernard , who bought a one bedroom flat in Yeovil in October 2011. We are asked if we could estimate the price would likely be for a ninety year lease extension. Similar flats in Yeovil with 100 year plus lease were in the region of £193,400. The average amount of ground rent was £65 billed per annum. The lease concluded on 7 July 2085. Given that there were 59 years left we estimated the premium to the freeholder for the lease extension to be within £21,900 and £25,200 exclusive of legals.
Dr H Nelson bought a studio flat in Yeovil in November 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to extend the lease by a further 90 years. Identical flats in Yeovil with 100 year plus lease were in the region of £255,000. The average ground rent payable was £50 billed every twelve months. The lease elapsed on 13 October 2096. Given that there were 70 years remaining we approximated the premium to the freeholder for the lease extension to be between £10,500 and £12,000 exclusive of legals.