The market value of Fairford 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 materialy once the unexpired lease term is less than eighty years
It is generally accepted that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the premises will be equivalent in value to 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
Engaging our service gives you increased control over the value of your Fairford leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy correspondence with the freeholder of her one bedroom apartment in Fairford, Amelia commenced the lease extension process as the eighty year mark was swiftly coming. The lease extension completed in March 2011. The freeholder’s costs were negotiated to less than 600 pounds.
In 2010 we were approached by Mr and Mrs. J Lefebvre who, having took over the lease of a purpose-built apartment in Fairford in January 1997. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Comparable properties in Fairford with a long lease were valued around £198,800. The mid-range ground rent payable was £55 collected per annum. The lease concluded on 14 May 2080. Taking into account 55 years outstanding we estimated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 plus fees.
Mr Elijah Flores took over the lease of a ground floor flat in Fairford in June 2006. The dilemma was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar homes in Fairford with an extended lease were worth £300,000. The average amount of ground rent was £50 billed per annum. The lease expired in 2100. Given that there were 75 years remaining we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus costs.