It’s a harsh truth that a Formby residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Formby property market.Where your lease has approximately ninety years left, you need to 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 falls lower than 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 should be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is generally accepted that a property with more than one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Lease extensions in Formby can be a difficult process. We recommend you secure professional help from a conveyancing solicitor 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.
Last October Ethan, started to get near to the 80-year threshold with the lease on his studio apartment in Formby. Having bought his flat twenty years ago, the length of the lease was of no significance. Fortunately, it dawned on him that he needed to take steps soon on Extending the lease. Ethan extended the lease just in the nick of time in June. Ethan and the freeholder via the managing agents eventually settled on sum of £5,500 . If the lease had dipped to less than 80 years, the figure would have become more costly by a minimum £900.
Mr and Mrs. K Jones took over the lease of a recently refurbished flat in Formby in May 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by 90 years. Comparative flats in Formby with 100 year plus lease were in the region of £193,400. The mid-range ground rent payable was £65 collected annually. The lease end date was in 2084. Taking into account 59 years outstanding we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 not including fees.
Mrs Courtney Petit completed a basement flat in Formby in November 1995. The question was if we could estimate the premium would be for a 90 year lease extension. Identical homes in Formby with 100 year plus lease were in the region of £250,000. The average amount of ground rent was £50 invoiced quarterly. The lease ended on 28 August 2095. Given that there were 70 years remaining we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.