The value of Launceston 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
Leasehold premises in Launceston with more than one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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; |
| Chelsea 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. |
| 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. |
| 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 |
| 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 Launceston can be a difficult process. We recommend you procure guidance from a lawyer and valuer with experience in this area.
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 Launceston lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
After unsuccessful discussions with the landlord of her first floor flat in Launceston, Zoe started the lease extension process just as her lease was nearing the critical 80-year mark. The legal work was concluded in May 2009. The freeholder’s costs were negotiated to about 450 pounds.
In 2010 we were approached by Dr Sebastian Murphy who, having acquired a newly refurbished apartment in Launceston in September 2011. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Identical flats in Launceston with an extended lease were worth £252,800. The mid-range ground rent payable was £65 billed quarterly. The lease ended on 5 March 2090. Taking into account 65 years remaining we approximated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 plus costs.
Mr R Green owned a basement apartment in Launceston in June 2000. We are asked if we could shed any light on how much (approximately) price would be to extend the lease by 90 years. Comparative properties in Launceston with 100 year plus lease were in the region of £191,400. The average ground rent payable was £55 collected monthly. The lease expired in 2079. Given that there were 54 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £34,200 and £39,600 plus fees.