Horfield residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Horfield can be a difficult process. We recommend you get professional help from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Horfield lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Oscar owned a studio flat in Horfield on the market with a lease of a few days over 72 years left. Oscar on an informal basis approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Oscar to invoke his statutory right. Oscar obtained expert advice and was able to make an informed judgement and deal with the matter and sell the property.
Mr and Mrs. T Brooks purchased a purpose-built apartment in Horfield in September 2012. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar premises in Horfield with 100 year plus lease were valued about £300,000. The average amount of ground rent was £50 billed yearly. The lease ended in 2100. Given that there were 75 years as a residual term we calculated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.
In 2009 we were e-mailed by Dr R Green who, having completed a one bedroom apartment in Horfield in February 2004. The dilemma was if we could estimate the premium could be for a 90 year lease extension. Comparable flats in Horfield with a long lease were valued about £250,400. The mid-range ground rent payable was £65 billed yearly. The lease terminated on 2 August 2089. Having 64 years remaining we estimated the compensation to the freeholder for the lease extension to be between £19,000 and £22,000 not including fees.