Owning a apartment usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Grays. Inevitably, the period of lease left reduces over time. This may slip by relatively unnoticed when the flat or house has to be sold or re-mortgaged. The fewer the years remaining the lower the value of the property and the more it will cost to procure a lease extension. Eligible long lease owners in Grays have the right to extend the lease for a further ninety years in accordance with the 1993 Leasehold Reform Act. You should give due attention before putting off your Grays lease extension. Holding off that expense now simply increases the price you will eventually have to pay for a lease extension
Leasehold properties in Grays with more than 100 years remaining on the lease are often 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 purchasing the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Grays lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In recent months Joseph, came critically close to the 80-year mark with the lease on his garden flat in Grays. In buying his flat two decades ago, the length of the lease was of no bearing. Thankfully, he realised he needed to take steps soon on Extending the lease. Joseph was able to extend his lease just ahead of time last January. Joseph and the landlord eventually settled on a premium of £6,000 . If he had missed the deadline, the price would have escalated by at least £1,100.
Mr and Mrs. W Lambert moved into a one bedroom apartment in Grays in April 2001. The dilemma was if we could estimate the premium would be for a 90 year lease extension. Comparable residencies in Grays with a long lease were valued about £275,000. The average amount of ground rent was £55 invoiced per annum. The lease finished on 19 May 2102. Having 77 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £13,300 and £15,400 exclusive of expenses.
An example of a Lease Extension case for a Grays premises is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case related to 13 flats. The number of years remaining on the existing lease(s) was 76 years.