Calculations and comparisons on a £140,000 property

These figures are illustrative only.  Future and individual circumstances may vary / and be dependant on mortgage rates. 

Figures assume an inflation rate of 2.5% per year. 

A 35 year mortgage at published Bank of Santander rates (1.99 5 yr fixed followed by standard variable currently 4%).

Help to Buy at 20% equity loan free for 5 years.

We are pleased to introduce a “whole of market” mortgage broker.

 

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Leasehold - Other apartments

Buy a leasehold apartment with approx 120 yr lease – Beware of the leasehold trap. Leasehold is a type of tenancy; it is not the same as outright ownership.

In 35 years you will have paid:

Mortgage,

Ground rent,

Management Fees & Commissions,

Building Insurance,

Maintenance of communal areas,

Sinking Fund.

Total Cost: £322,106.

You will own the residual value of the lease which reduces in value to 0 at the end of term.

2019 – Building societies and banks are suddenly realising leasehold isn’t the same as it used to be historically.  

You will also have to consider purchasing a lease extension as leasehold properties are generally unmortgageable due to quickly reducing values offering low security. Some building societies and banks are raising this towards 100 years.

Likewise if the annual ground rent is onerous, greater than 0.01% of the building value (£100 per annum per £100,000 building value), again many building societies are refusing mortgages. This will restrict buyers to cash and reduce any value accordingly.

The recent movements by building societies to harden their lending position is expected to get worse and many more leaseholders find it harder to sell. 

For a better explanation on how leasehold properties work see www.gov.uk/government/publications/how-to-lease/how-to-lease

Details on assumptions, calculations and mortgages below

[pdf-embedder url=”http://hoptonbuild.co.uk/wp-content/uploads/2019/09/hb-leasehold-35-mtge-analysis.pdf” ]

Freehold - Our apartments

Buy a freehold apartment within our unique commonhold development

Own your apartment freehold. No ground rent, and also having joint control and ownership over any communal maintenance, management and savings.

In 35 years, you will have paid:

  • Mortgage
  • Building repairs
  • Building insurance
  • Maintenance of Communal areas
  • Sinking Fund

Total Cost £240,456

Ownership = Apartment (Now mortgage free)

Your value £332,249 + £10,986 in sinking fund.

If inflation rises above 2.5% the benefits will be greater.

Details on assumptions, calculations and mortgages below

[pdf-embedder url=”http://hoptonbuild.co.uk/wp-content/uploads/2019/09/hb-freehold-35-mtge-analysis.pdf” ]

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