If you are facing a significant premium because your lease in Appleton has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should start your Appleton lease extension today:
A Appleton lease depreciates with the years remaining on the lease.
Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Appleton. Inevitably, the term of lease left shortens as time goes by. This may slip by relatively unnoticed when the flat or house needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension. Eligible leaseholders in Appleton have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Please give careful consideration before delaying your Appleton lease extension. Putting off that expense now only increases the price you will eventually incur for a lease extension
An extended lease is almost the same value as a freehold
Leasehold premises in Appleton with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
Mortgage lenders may decide not to issue a mortgage with a short lease
Mortgage lenders have specific criteria when lending monies charged on leasehold homes. Some will simply refrain from lending at all once the residual lease term falls under a specified unexpired lease term. Many Lending institutions will not consider property with an unexpired below 75 years as adequate security. As well as impacting your ability to sell, it is also relevant where you are wanting to remortgage your Appleton property.
| Lender |
Requirement
|
|---|
| Barclays plc |
Leases with less than 70 years at the commencement of the mortgage are not acceptable.
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;
|
| 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.
|
| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Royal Bank of Scotland |
Mortgage term plus 30 years.
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Get in touch with one of our Appleton lease extension solicitors or enfranchisement solicitors
Lease extensions in Appleton can be a difficult process. We recommend you obtain guidance from a lawyer and surveyor with experience in this area.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Appleton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Appleton Lease Extension Case Studies:
Sophia, Appleton, Cheshire,
Off the back of unsuccessful discussions with the freeholder of her two bedroom apartment in Appleton, Sophia commenced the lease extension process as the eighty year threshold was rapidly advancing. The transaction was finalised in September 2012. The landlord’s costs were kept to an absolute minimum.
Appleton case:
Mrs Phoebe Bernard purchased a one bedroom apartment in Appleton in September 2003. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparative flats in Appleton with a long lease were worth £225,800. The mid-range amount of ground rent was £60 invoiced quarterly. The lease elapsed on 13 April 2086. Taking into account 60 years remaining we approximated the compensation to the freeholder for the lease extension to be within £25,700 and £29,600 not including fees.
Appleton case:
Dr U Moreau was assigned a lease of a purpose-built apartment in Appleton in June 1999. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year extension to my lease. Comparable flats in Appleton with an extended lease were valued around £210,000. The mid-range amount of ground rent was £50 invoiced every twelve months. The lease ran out on 15 October 2106. Having 80 years outstanding we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.