Unfortunately that a Formby residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Formby property prices.Where your lease has approximately 90 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 dips below 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Formby will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timeframes 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 formalities.
Leasehold residencies in Formby with over one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Formby,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Formby valuers.
After lengthy correspondence with the freeholder of her first floor flat in Formby, Samantha started the lease extension process just as her lease was approaching the all-important eighty-year mark. The legal work was concluded in July 2012. The landlord’s fees were kept to an absolute minimum.
In 2009 we were contacted by Mrs Elizabeth Khan who, having completed a purpose-built flat in Formby in June 2010. The question was if we could estimate the price could be for a ninety year extension to my lease. Similar residencies in Formby with an extended lease were valued about £186,000. The average ground rent payable was £65 billed quarterly. The lease ran out on 5 May 2084. Having 58 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £24,700 and £28,600 exclusive of costs.
Last Summer we were e-mailed by Mr H Martinez , who completed a one bedroom apartment in Formby in February 2007. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by a further 90 years. Similar properties in Formby with an extended lease were worth £250,000. The average amount of ground rent was £50 collected monthly. The lease expiry date was in 2095. Having 69 years outstanding we approximated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of fees.