The value of Neston 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 escalate materialy once the unexpired lease term is less than 80 years
Leasehold premises in Neston with in excess of one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Neston,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Neston valuers.
Liam owned a 2 bedroom apartment in Neston being marketed with a lease of just over 59 years left. Liam informally approached his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 per annum. No ground rent would be due on a lease extension were Liam to invoke his statutory right. Liam obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2012 we were called by Dr K Jones who, having owned a first floor flat in Neston in July 1998. We are asked if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Identical premises in Neston with a long lease were worth £257,800. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease expired on 19 March 2090. Given that there were 65 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £18,100 and £20,800 exclusive of professional charges.
Last Summer we were phoned by Ms H Sharif , who purchased a one bedroom apartment in Neston in January 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by ninety years. Comparative premises in Neston with a long lease were worth £191,400. The average ground rent payable was £55 billed annually. The lease concluded in 2079. Given that there were 54 years unexpired we calculated the compensation to the landlord for the lease extension to be within £34,200 and £39,600 exclusive of legals.