Porthleven residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a period of years.
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years left, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Porthleven,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Porthleven valuers.
Last Autumn Harry, came seriously close to the 80-year mark with the lease on his basement flat in Porthleven. In buying his home 19 years previously, the length of the lease was of no importance. As luck would have it, he noticed he would soon be paying an inflated amount for Extending the lease. Harry extended the lease just under the wire in September. Harry and the freeholder via the management company in the end settled on the final figure of £6,000 . If he not met the deadline, the amount would have escalated by at least £1,025.
Last Spring we were approach by Mrs U Simon , who moved into a newly refurbished flat in Porthleven in August 2009. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparative flats in Porthleven with an extended lease were worth £176,200. The mid-range amount of ground rent was £65 billed annually. The lease came to a finish on 10 October 2080. Given that there were 56 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £29,500 and £34,000 exclusive of expenses.
Mr and Mrs. J Vincent was assigned a lease of a ground floor apartment in Porthleven in January 2003. The question was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparative premises in Porthleven with an extended lease were valued around £242,600. The average amount of ground rent was £45 billed yearly. The lease came to a finish on 6 October 2091. Taking into account 67 years unexpired we estimated the premium to the landlord to extend the lease to be within £11,400 and £13,200 exclusive of costs.