Nailsworth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. It is the case that most Nailsworth tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Nailsworth you would be well advised to investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Nailsworth flat owner with a lease having around eighty years unexpired should take action to ensure that a lease extension is put in place without delay
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
Using our service will provide you increased control over the value of your Nailsworth leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Edward was the the leasehold proprietor of a studio flat in Nailsworth being marketed with a lease of fraction over 59 years left. Edward informally contacted his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be payable on a lease extension were Edward to exercise his statutory right. Edward procured expert advice and was able to make a more informed decision and deal with the matter and sell the property.
In 2013 we were e-mailed by Ms O Hall who, having moved into a basement apartment in Nailsworth in November 2004. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would be to prolong the lease by an additional years. Similar flats in Nailsworth with an extended lease were worth £181,600. The average ground rent payable was £55 collected yearly. The lease expired in 2078. Considering the 52 years unexpired we calculated the premium to the landlord for the lease extension to be within £30,400 and £35,200 plus expenses.
Last Christmas we were phoned by Dr W Gunderson , who bought a one bedroom apartment in Nailsworth in April 2011. The question was if we could approximate the price would be to prolong the lease by an additional years. Identical properties in Nailsworth with a long lease were valued around £285,000. The mid-range amount of ground rent was £45 collected annually. The lease expiry date was on 19 January 2098. Considering the 72 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.