The market value of Downend leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate significantly once the remaining term is below than 80 years
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Irrespective of whether you are a tenant or a landlord in Downend,the lease extension experts 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 Downend valuers.
Trailing protracted discussions with the landlord of her two bedroom flat in Downend, Rachel initiated the lease extension process just as her lease was nearing the critical 80-year threshold. The legal work completed in April 2008. The landlord’s charges were kept to an absolute minimum.
Dr Andrew Thompson moved into a newly refurbished apartment in Downend in April 2011. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative properties in Downend with an extended lease were in the region of £191,400. The average ground rent payable was £55 collected quarterly. The lease concluded on 9 October 2079. Considering the 54 years unexpired we estimated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 not including costs.
Last Spring we were phoned by Ms Kelsey González , who took over the lease of a one bedroom flat in Downend in November 1998. The dilemma was if we could estimate the price would likely be for a 90 year extension to my lease. Comparable premises in Downend with an extended lease were valued about £295,000. The average ground rent payable was £45 billed per annum. The lease came to a finish on 6 April 2099. Having 74 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.