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 reduction being disguised by increases in the Formby property market.Once your lease gets to 85ish years, you should start thinking about 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 falls under eighty years - otherwise a higher amount will be payable. The majority of flat owners in Formby will be able to extend under the legislation; however a conveyancer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a landlord in Formby,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Formby valuers.
Last year Ben, started to get near to the eighty-year threshold with the lease on his one bedroom apartment in Formby. Having purchased his property 18 years ago, the lease term was of minimal significance. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Ben arranged for a lease extension just under the wire last March. Ben and the freeholder via the management company ultimately agreed on sum of £5,000 . If he had missed the deadline, the premium would have become more exhorbitant by at least £1,050.
Last January we were e-mailed by Dr Caleb Adams , who acquired a recently refurbished apartment in Formby in August 1999. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Similar residencies in Formby with an extended lease were in the region of £166,400. The average ground rent payable was £60 collected every twelve months. The lease terminated in 2080. Considering the 54 years remaining we calculated the premium to the landlord for the lease extension to be within £32,300 and £37,400 exclusive of fees.
Ms Rachel Lambert moved into a purpose-built flat in Formby in October 2001. 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 an additional years. Identical flats in Formby with an extended lease were valued around £227,800. The mid-range ground rent payable was £45 invoiced quarterly. The lease elapsed on 19 September 2091. Given that there were 65 years outstanding we calculated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 not including fees.