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

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

Monthly comparisons

Description.
 RentingLeaseholdFreehold /
Commonhold
Saving:
On Leasehold
Saving:
On Freehold /
Commonhold
2054-1305-1005-763301542
2020-564-492-40372161
2021-578-495-40483174
2022-592-498-40694187
2023-607-501-407106200
2024-622-505-409117214
2025-638-610-5512887
2026-654-653-635119
2027-670-738-660-6811
2028-687-786-685-992
2029-704-830-703-1261
2030-722-834-704-11217
2031-740-838-706-9833
2032-758-842-708-8350
2033-777-846-710-6967
2034-797-850-712-5485
2035-816-855-714-38103
2036-837-859-716-22121
2037-858-864-718-6140
2038-879-889-720-10159
2039-901-894-7227179
2040-924-899-72525199
2041-947-904-72743220
2042-971-910-72961241
2043-995-915-73280263
2044-1020-920-73499285
2045-1045-926-737119308
2046-1071-932-740139332
2047-1098-938-742160356
2048-1126-965-745161381
2049-1154-971-748183406
2050-1183-977-751205432
2051-1212-984-754228458
2052-1242-991-757252486
2053-1273-998-760276514