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Why you should commence your Frenchay Common lease extension


Main reasons to start your Frenchay Common lease extension today:

Increase your lease and increase your Frenchay Common property value

Frenchay Common leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Frenchay Common tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Frenchay Common you must check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Frenchay Common leaseholder with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay

An extended lease is almost the same value as a freehold

Leasehold properties in Frenchay Common with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges warrant it.

Banks and Building Societies may decide not to lend on a short lease

Nearly all banks and building societies require a lengthy amount of time remaining on a leasehold property before they will consider lending on it. Regardless of whether you require a mortgage, you should bear in mind that it is reasonable to assume that someone wanting to buy your property in the future might well do, so if they can't get a mortgage, then the market price of your property will likely suffer. Since 2008 the majority of banks and building societies have increased the required minimum lease length that they are willing to lend on

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.
Halifax Minimum 70 years from the date of the mortgage.
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
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
The Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges

For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

LEASE EXTENSIONS

We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office

What makes us experts in Frenchay Common lease extensions?

Retaining our service will provide you better control over the value of your Frenchay Common leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.

Frenchay Common Lease Extension Example Cases:

Joseph, Frenchay Common, Bristol

Last October Joseph, started to get close to the 80-year mark with the lease on his garden apartment in Frenchay Common. In buying his property twenty years previously, the unexpired term was of minimal concern. As luck would have it, it dawned on him that he needed to take steps soon on a lease extension. Joseph extended the lease just in the nick of time last March. Joseph and the freeholder via the management company eventually agreed on sum of £5,000 . If the lease had gone to less than eighty years, the amount would have gone up by at least £925.

Frenchay Common case:

Last Christmas we were approach by Mr George Sharif , who moved into a first floor apartment in Frenchay Common in October 2006. The dilemma was if we could estimate the price would likely be to extend the lease by ninety years. Comparable residencies in Frenchay Common with 100 year plus lease were in the region of £260,000. The average amount of ground rent was £50 invoiced monthly. The lease lapsed on 7 February 2096. Considering the 72 years as a residual term we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.

Frenchay Common case:

In 2014 we were called by Mr and Mrs. Y Jackson who, having moved into a one bedroom flat in Frenchay Common in September 2000. The dilemma was if we could approximate the compensation to the landlord could be for a 90 year extension to my lease. Similar residencies in Frenchay Common with 100 year plus lease were in the region of £256,600. The mid-range amount of ground rent was £60 collected yearly. The lease finished on 3 April 2076. Considering the 52 years outstanding we calculated the premium to the landlord to extend the lease to be within £39,000 and £45,000 not including expenses.