If you are facing a significant premium because your lease in Gerrards Cross has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to start your Gerrards Cross lease extension today:
Increase your lease and increase your Gerrards Cross property value
Gerrards Cross leases on domestic properties are gradually losing value. Where your lease has about ninety years left, you should start thinking about a lease extension. An important point to note is that it is financially advisable for the lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher premium will be due. Flat owners in Gerrards Cross will mostly be legally entitled to a lease extension; however It would be wise to check with a conveyancing solicitor to check your eligibility. In certain circumstances you may not be entitled. There are also strict timetables and procedures to comply with once the process has commenced so it’s wise to be guided by a conveyancer during the process.
Gerrards Cross property with a lease extension is almost the same value as a freehold
Leasehold properties in Gerrards Cross with over one hundred years outstanding 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 property. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
Banks and Building Societies may not grant a mortgage on a short lease
Lenders will not lend on short residential leases. You are likely to encounter problems if you need to sell your flat in Gerrards Cross if the remaining lease term is below the criteria set by the majority of banks and building societies. Different lenders have different requirements but on the whole theyrequire a minimum remaining lease term of seventy years.
| Lender |
Requirement
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|---|
| 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.
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| 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.
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| Nationwide Building Society |
- Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
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
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
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 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- 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 is 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 55 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% 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 (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- 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 (does not apply to Shared Ownership)
- 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 charged which is more than on a peppercorn basis
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% 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 a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| Santander |
If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. 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.
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.
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| Royal Bank of Scotland |
Mortgage term plus 30 years.
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What makes us experts in Gerrards Cross lease extensions?
Using our service gives you better control over the value of your Gerrards Cross leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell.
The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Gerrards Cross Lease Extension Case Summaries:
Alexandra, Gerrards Cross, Buckinghamshire,
Following unsuccessful negotiations with the landlord of her garden apartment in Gerrards Cross, Alexandra initiated the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work was concluded in April 2011. The freeholder’s charges were negotiated to under five hundred GBP.
Gerrards Cross case:
Mr Andrew Miller acquired a one bedroom flat in Gerrards Cross in May 1999. The question was if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Gerrards Cross with an extended lease were in the region of £260,200. The mid-range ground rent payable was £65 collected per annum. The lease ended in 2092. Taking into account 66 years remaining we calculated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 plus fees.
Decision in Hillingdon
An example of a Lease Extension case for a Gerrards Cross residence is
Flats 8, 11 and 15 Craigmore Court 46 Murray Road in December 2013. The tribunal held that the price payable by the Applicant tenant of
Flat 8 to acquire an extended lease shall be £26,438 plus £1 to the
intermediate lessee .
The tribunal held that the price payable by the Applicant tenants of
Flat 11 to acquire an extended lease shall be £26,791 plus £1 to the
intermediate lessee.
The tribunal held that the price payable by the Applicant tenant of
Flat 15 to acquire an extended lease shall be £26,638 plus £1 to the
intermediate lessee .
This case was in relation to 3 flats. The unexpired lease term was 71 years.