Unfortunately that a Formby residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Formby property prices.Once your lease nears 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be due. The majority of flat owners in Formby will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold properties in Formby with in excess of one hundred years remaining 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 home. In such circumstances there is often little upside in buying the reversionary interest 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service will provide you better control over the value of your Formby leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy negotiations with the freeholder of her ground floor apartment in Formby, Mia started the lease extension process just as the lease was nearing the critical 80-year threshold. The lease extension was finalised in April 2007. The freeholder’s fees were kept to an absolute minimum.
Dr Bethan González took over the lease of a ground floor apartment in Formby in June 2010. The dilemma was if we could approximate the price would be for a 90 year lease extension. Identical premises in Formby with an extended lease were worth £250,000. The average amount of ground rent was £50 collected yearly. The lease came to a finish on 24 October 2095. Having 70 years remaining we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.
In 2009 we were e-mailed by Dr U Fournier who, having moved into a purpose-built flat in Formby in January 2005. We are asked if we could shed any light on how much (roughly) price would be to prolong the lease by a further 90 years. Similar homes in Formby with 100 year plus lease were worth £246,800. The average ground rent payable was £60 invoiced quarterly. The lease expired in 2075. Taking into account 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 plus legals.