The value of Millwall leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the remaining term is below than 80 years
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Millwall leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Two years ago Sebastian, started to get near to the 80-year threshold with the lease on his garden flat in Millwall. In buying his home two decades ago, the lease term was of minimal relevance. by good luck, it dawned on him that he needed to take steps soon on a lease extension. Sebastian was able to extend his lease just in the nick of time in April. Sebastian and the landlord subsequently settled on a premium of £5,500 . If he failed to meet the deadline, the price would have become more exhorbitant by at least £1,150.
Last Christmas we were approach by Mr and Mrs. V Young , who acquired a newly refurbished apartment in Millwall in September 2005. We are asked if we could estimate the price would be to prolong the lease by 90 years. Similar residencies in Millwall with an extended lease were in the region of £285,000. The mid-range amount of ground rent was £45 invoiced annually. The lease came to a finish on 4 October 2096. Taking into account 71 years remaining we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of expenses.
An example of a Freehold Enfranchisement case for a Millwall property is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case related to 3 flats. The unexpired term as at the valuation date was 101.61 years.