Farnham Royal leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Farnham Royal residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Farnham Royal you must see if your lease has between seventy and 90 years remaining. There are good reasons why a Farnham Royal leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 conveyancing solicitors 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 conveyancer we work with provide it.
Off the back of lengthy negotiations with the landlord of her first floor apartment in Farnham Royal, Holly started the lease extension process just as the lease was coming close to the critical 80-year threshold. The lease extension was finalised in November 2008. The freeholder’s costs were negotiated to under 550 GBP.
Last Summer we were e-mailed by Mr and Mrs. L Baker , who took over the lease of a purpose-built apartment in Farnham Royal in September 1998. The question was if we could approximate the price could be to extend the lease by 90 years. Comparative flats in Farnham Royal with an extended lease were worth £220,400. The average amount of ground rent was £45 collected every twelve months. The lease ran out in 2089. Taking into account 64 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £15,200 and £17,600 plus costs.
Mr and Mrs. H Clarke was assigned a lease of a newly refurbished flat in Farnham Royal in April 2000. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical homes in Farnham Royal with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 invoiced per annum. The lease ran out on 1 November 2099. Having 74 years outstanding we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including costs.