Unfortunately that a Farnham Royal residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Farnham Royal property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If the number of years remaining slips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Farnham Royal will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold residencies in Farnham Royal with over 100 years remaining 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 buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure Farnham Royal 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.
Following lengthy negotiations with the freeholder of her first floor apartment in Farnham Royal, Stephanie started the lease extension process just as her lease was nearing the all-important eighty-year deadline. The transaction completed in April 2015. The freeholder’s charges were kept to an absolute minimum.
Ms Shannon Smith moved into a ground floor flat in Farnham Royal in July 1999. We are asked if we could estimate the premium could be for a ninety year extension to my lease. Comparative flats in Farnham Royal with 100 year plus lease were in the region of £215,600. The average ground rent payable was £45 billed every twelve months. The lease lapsed in 2088. Having 62 years unexpired we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including costs.
Mr and Mrs. M Bailey moved into a one bedroom flat in Farnham Royal in April 2011. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Comparable residencies in Farnham Royal with a long lease were worth £265,000. The average amount of ground rent was £50 collected annually. The lease ran out in 2099. Having 73 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.