Formby leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Formby residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Formby you must check if your lease has between seventy and 90 years left. There are compelling reasons why a Formby flat owner with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 35 years left, the residence will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Halifax | 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 professional help from a conveyancing solicitor and surveyor 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.
Ollie was the the leasehold proprietor of a high value flat in Formby on the market with a lease of a few days over 59 years left. Ollie informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Ollie to exercise his statutory right. Ollie obtained expert advice and was able to make a more informed judgement and handle with the matter and readily saleable.
Mr Felix White acquired a first floor flat in Formby in October 2003. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Similar premises in Formby with 100 year plus lease were worth £203,200. The mid-range ground rent payable was £65 collected monthly. The lease expired in 2087. Having 61 years outstanding we approximated the premium to the freeholder for the lease extension to be within £19,000 and £22,000 not including fees.
Mr and Mrs. G Jones completed a garden flat in Formby in September 2005. We are asked if we could estimate the premium could be for a 90 year extension to my lease. Comparative residencies in Formby with 100 year plus lease were worth £260,000. The mid-range amount of ground rent was £50 collected annually. The lease elapsed on 17 April 2098. Considering the 72 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of fees.