The market value of a leasehold property in Castleton is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee difficulties on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised in advance of the eighty year cut off point. Statute enables Castleton qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Castleton with in excess of 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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; |
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Retaining our service gives you enhanced control over the value of your Castleton leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy negotiations with the landlord of her first floor apartment in Castleton, Madeleine started the lease extension process just as the lease was nearing the all-important 80-year deadline. The lease extension was finalised in August 2014. The freeholder’s costs were negotiated to a tad over five hundred GBP.
Last month we were approach by Mrs Rebecca Rodríguez , who bought a studio apartment in Castleton in April 2008. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Identical homes in Castleton with an extended lease were worth £285,000. The mid-range amount of ground rent was £45 billed yearly. The lease end date was in 2096. Having 71 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of fees.
In 2013 we were phoned by Dr Stanley Taylor who, having bought a one bedroom apartment in Castleton in March 2003. The question was if we could shed any light on how much (approximately) price could be to prolong the lease by ninety years. Identical homes in Castleton with a long lease were in the region of £230,800. The average ground rent payable was £60 billed quarterly. The lease elapsed in 2085. Having 60 years as a residual term we estimated the premium to the landlord for the lease extension to be within £24,700 and £28,600 exclusive of costs.