The market value of March leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the unexpired lease term is below than eighty years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Retaining our service gives you increased control over the value of your March leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Zachary, started to get near to the eighty-year threshold with the lease on his first floor apartment in March. In buying his home two decades ago, the length of the lease was of minimal interest. by good luck, he realised he needed to take steps soon on Extending the lease. Zachary arranged for a lease extension at the eleventh hour last August. Zachary and the landlord subsequently agreed on the final figure of £6,000 . If he failed to meet the deadline, the premium would have become more costly by at least £1,075.
Last Summer we were contacted by Ms N Rodríguez , who took over the lease of a newly refurbished apartment in March in June 2008. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by ninety years. Identical homes in March with a long lease were valued around £174,200. The average amount of ground rent was £55 collected per annum. The lease concluded in 2077. Taking into account 51 years left we approximated the premium to the freeholder to extend the lease to be within £31,400 and £36,200 not including costs.
Last year we were e-mailed by Dr Dexter Díaz , who acquired a first floor apartment in March in July 2009. We are asked if we could approximate the price would be for a 90 year extension to my lease. Identical residencies in March with an extended lease were valued around £285,000. The mid-range ground rent payable was £45 invoiced per annum. The lease terminated on 11 March 2097. Given that there were 71 years remaining we calculated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including costs.