Chances are that if you own a flat in Downend you actually own a long leasehold interest over your property
Leasehold properties in Downend with over one hundred years outstanding on the lease are sometimes 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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with undertake Downend lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Two years ago George, started to get near to the eighty-year threshold with the lease on his leasehold flat in Downend. In buying his flat 18 years ago, the unexpired term was of little significance. Fortunately, he noticed he needed to take action soon on a lease extension. George extended the lease just ahead of time in September. George and the landlord who owned the flat above in the end settled on the final figure of £5,000 . If the lease had slipped lower than eighty years, the amount would have escalated by a minimum £1,025.
In 2011 we were e-mailed by Mr Adam Flores who, having moved into a first floor flat in Downend in July 2001. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative homes in Downend with a long lease were in the region of £243,000. The mid-range amount of ground rent was £65 billed quarterly. The lease terminated on 12 February 2087. Having 63 years unexpired we estimated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of legals.
In 2009 we were called by Ms Rhiannon Mason who, having purchased a purpose-built flat in Downend in November 2012. The question was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Similar premises in Downend with an extended lease were in the region of £181,600. The mid-range amount of ground rent was £55 collected quarterly. The lease concluded in 2076. Taking into account 52 years unexpired we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of legals.