The re-sale value of a leasehold property in Greenfield depends on how long the lease has remaining. If it is near to or less than eighty years you should envisage difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be addressed ahead of the eighty year threshold. Statute enables Greenfield qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Greenfield with more than 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 reversionary interest unless savings on ground rent and maintenance charges warrant 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Greenfield,the lease extension lawyers 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 Greenfield valuers.
After lengthy negotiations with the freeholder of her ground floor apartment in Greenfield, Robyn started the lease extension process just as the lease was coming close to the crucial eighty-year deadline. The lease extension completed in March 2014. The landlord’s charges were kept to an absolute minimum.
In 2013 we were approached by Mr G Wright who, having purchased a first floor flat in Greenfield in February 2000. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by an additional years. Similar homes in Greenfield with a long lease were worth £280,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease end date was in 2102. Having 78 years outstanding we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
Mr and Mrs. V Green owned a purpose-built flat in Greenfield in February 2011. The question was if we could shed any light on how much (approximately) premium would be to extend the lease by an additional years. Similar residencies in Greenfield with an extended lease were worth £191,000. The average amount of ground rent was £65 billed monthly. The lease lapsed on 27 June 2082. Taking into account 58 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £23,800 and £27,400 plus expenses.