Formby residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a set term.
Leasehold residencies in Formby with more than one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate 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. |
| 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; |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Formby can be a difficult process. We recommend you obtain 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 a wealth of experience 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.
Two years ago Jason, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Formby. In buying his property two decades ago, the unexpired term was of little interest. Fortunately, he noticed he needed to take action soon on Extending the lease. Jason was able to extend his lease just in the nick of time in September. Jason and the landlord who owned the flat above eventually agreed on the final figure of £5,500 . If the lease had fallen to less than 80 years, the amount would have increased by a minimum £1,000.
Last Summer we were approach by Mrs Molly Howard , who purchased a one bedroom apartment in Formby in February 1995. We are asked if we could estimate the premium would be for a ninety year lease extension. Identical homes in Formby with 100 year plus lease were valued around £264,000. The mid-range amount of ground rent was £60 invoiced yearly. The lease elapsed in 2079. Considering the 53 years outstanding we approximated the premium to the freeholder for the lease extension to be between £37,100 and £42,800 plus expenses.
Mr V Stewart bought a one bedroom flat in Formby in October 1995. We are asked if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparative homes in Formby with a long lease were in the region of £220,400. The average ground rent payable was £45 collected annually. The lease concluded in 2090. Taking into account 64 years left we calculated the compensation to the landlord for the lease extension to be between £15,200 and £17,600 plus expenses.