With a residential leasehold property in Formby, you are actually purchasing an entitlement to live in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should think about 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 gets disproportionately greater particularly once there are less than 80 years left. Residents in Formby with a lease approaching 81 years left should seriously think of extending it without delay. When the lease term has below 80 years remaining, under the current statute the landlord is entitled to calculate and charge a greater premium, based on a technical computation, known as “marriage value” which is due.
Leasehold properties in Formby with over 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit 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. |
| 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. |
| Yorkshire 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. |
Lease extensions in Formby can be a difficult process. We recommend you get guidance from a conveyancer and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Formby lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 6 months of unsuccessful negotiations with the freeholder of her garden apartment in Formby, Danielle commenced the lease extension process just as the lease was nearing the critical eighty-year mark. The legal work was concluded in November 2010. The landlord’s fees were kept to an absolute minimum.
Dr Lucy Parker took over the lease of a garden apartment in Formby in June 2009. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by an additional years. Similar properties in Formby with an extended lease were valued around £265,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease ended in 2099. Given that there were 74 years outstanding we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus professional charges.
In 2012 we were phoned by Dr Y Cooper who, having acquired a basement flat in Formby in July 2010. We are asked if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparative residencies in Formby with an extended lease were valued around £166,400. The average ground rent payable was £60 billed annually. The lease terminated on 14 June 2079. Taking into account 54 years left we approximated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 exclusive of expenses.