For those whose Lechlade home is held on a long lease, the message is clear – if no remedial action is taken, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is conventional wisdom that a residential leasehold with over 100 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 equivalent in value to a freehold for decades to come.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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 |
| Yorkshire 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. |
Retaining our service gives you enhanced control over the value of your Lechlade leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Omar was the the leasehold owner of a conversion flat in Lechlade being marketed with a lease of a little over fifty eight years remaining. Omar informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Omar to invoke his statutory right. Omar procured expert advice and secured an acceptable resolution informally and readily saleable.
Mr and Mrs. M Sharif purchased a garden flat in Lechlade in August 2005. The question was if we could approximate the compensation to the landlord would likely be for a ninety year extension to my lease. Similar premises in Lechlade with an extended lease were worth £260,000. The mid-range ground rent payable was £50 billed annually. The lease came to a finish on 18 February 2097. Given that there were 72 years as a residual term we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of costs.
Mr and Mrs. S Ali owned a one bedroom flat in Lechlade in April 1995. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by ninety years. Similar flats in Lechlade with a long lease were valued about £261,600. The mid-range amount of ground rent was £60 collected quarterly. The lease came to a finish on 26 August 2077. Taking into account 52 years unexpired we estimated the compensation to the landlord for the lease extension to be within £39,000 and £45,000 not including expenses.