It’s an underpublicised certainty that a Eaton Bray residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Eaton Bray property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher premium will be due. The majority of leasehold owners in Eaton Bray will be able to extend under the legislation; however a conveyancer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is generally considered that a property with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence 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; |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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 |
Irrespective of whether you are a tenant or a landlord in Eaton Bray,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Eaton Bray valuers.
Last year Hugo, came seriously near to the 80-year threshold with the lease on his studio apartment in Eaton Bray. Having bought his home 19 years ago, the unexpired term was of no importance. As luck would have it, he realised he would soon be paying an escalated premium for a lease extension. Hugo arranged for a lease extension at the eleventh hour last March. Hugo and the freeholder in the end agreed on the final figure of £5,500 . If the lease had dropped lower than eighty years, the price would have become more exhorbitant by at least £875.
In 2009 we were e-mailed by Mr O Lefèvre who, having took over the lease of a first floor flat in Eaton Bray in September 2012. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Similar residencies in Eaton Bray with an extended lease were in the region of £264,000. The average ground rent payable was £60 invoiced quarterly. The lease concluded on 27 March 2078. Having 53 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £37,100 and £42,800 plus expenses.
In 2013 we were called by Dr C Bailey who, having purchased a basement apartment in Eaton Bray in April 2003. The question was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Comparative residencies in Eaton Bray with 100 year plus lease were worth £220,400. The average ground rent payable was £45 collected per annum. The lease ran out on 26 August 2089. Considering the 64 years remaining we estimated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of expenses.