The market value of Coleford leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase significantly once the unexpired lease term is less than eighty years
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, 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 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Yorkshire Building Society | 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. |
Using our service will provide you increased control over the value of your Coleford leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Toby owned a studio apartment in Coleford on the market with a lease of fraction over 61 years unexpired. Toby on an informal basis spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Toby to exercise his statutory right. Toby procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Dr W Nelson bought a one bedroom flat in Coleford in March 2011. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by 90 years. Comparative residencies in Coleford with 100 year plus lease were worth £252,800. The mid-range ground rent payable was £65 invoiced every twelve months. The lease concluded in 2090. Having 65 years left we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of fees.
In 2012 we were contacted by Mr and Mrs. O Jackson who, having moved into a newly refurbished flat in Coleford in May 2010. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Identical premises in Coleford with a long lease were valued around £191,400. The average ground rent payable was £55 collected quarterly. The lease came to a finish on 11 March 2079. Given that there were 54 years left we calculated the premium to the freeholder to extend the lease to be within £34,200 and £39,600 exclusive of costs.