The market value of Ferndown leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can escalate substantially once the remaining term is below than 80 years
Leasehold premises in Ferndown with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake Ferndown 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 conveyancing solicitor we work with provide it.
Ali was the the leasehold proprietor of a conversion flat in Ferndown on the market with a lease of just over 59 years outstanding. Ali on an informal basis spoke with his freeholder a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Ali to invoke his statutory right. Ali obtained expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
In 2012 we were approached by Mr and Mrs. S Laurent who, having owned a basement flat in Ferndown in February 2001. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Comparable flats in Ferndown with 100 year plus lease were valued about £171,800. The mid-range amount of ground rent was £55 billed quarterly. The lease ended on 6 September 2075. Considering the 50 years as a residual term we calculated the premium to the landlord for the lease extension to be between £32,300 and £37,400 not including fees.
Last month we were called by Ms Tia Mitchell , who owned a first floor flat in Ferndown in November 1999. We are asked if we could estimate the price would likely be for a 90 year extension to my lease. Comparable residencies in Ferndown with 100 year plus lease were valued around £280,000. The mid-range amount of ground rent was £45 collected every twelve months. The lease expired in 2095. Considering the 70 years unexpired we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus costs.