With a long leasehold property in Fishponds, you are actually buying a right to reside in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially when there are fewer than 80 years remaining. Anyone in Fishponds with a lease drawing near to 81 years remaining should seriously think of extending it without delay. When a lease has less than eighty years outstanding, under the current statute the freeholder is entitled to calculate and charge a greater amount, based on a technical computation, strangely termed as “marriage value” which is payable.
Leasehold properties in Fishponds with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| 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. |
| 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 |
The conveyancing solicitors that we work with handle Fishponds 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.
Last October Ollie, came precariously near to the 80-year mark with the lease on his one bedroom flat in Fishponds. In buying his flat 19 years ago, the lease term was of no interest. Thankfully, he recognised he would soon be paying an inflated amount for Extending the lease. Ollie arranged for a lease extension just in the nick of time in July. Ollie and the landlord who owned the flat above in the end agreed on an amount of £5,000 . If the lease had slid below 80 years, the price would have escalated by a minimum £925.
Dr Jake Thomas took over the lease of a garden apartment in Fishponds in September 2000. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Comparable premises in Fishponds with an extended lease were worth £200,800. The mid-range amount of ground rent was £65 billed every twelve months. The lease elapsed on 24 April 2084. Taking into account 60 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £20,900 and £24,200 plus costs.
In 2014 we were approached by Ms N González who, having acquired a basement apartment in Fishponds in March 2011. We are asked if we could approximate the price would be to prolong the lease by a further 90 years. Comparable premises in Fishponds with a long lease were valued around £255,000. The average amount of ground rent was £50 billed yearly. The lease came to a finish in 2095. Having 71 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 not including fees.