Great Baddow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Great Baddow residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Great Baddow you must investigate if your lease has between 70 and 90 years remaining. There are compelling reasons why a Great Baddow leaseholder with a lease having around eighty years unexpired should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Great Baddow with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
The conveyancing solicitors that we work with handle Great Baddow 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 conveyancer we work with provide it.
Two years ago Michael, came dangerously close to the eighty-year threshold with the lease on his leasehold flat in Great Baddow. In buying his property two decades ago, the unexpired term was of minimal importance. Luckily, he recognised he needed to take steps soon on a lease extension. Michael extended the lease at the eleventh hour in September. Michael and the freeholder eventually settled on a premium of £5,500 . If he failed to meet the deadline, the price would have become more exhorbitant by a minimum £975.
Mr and Mrs. W Lee bought a garden flat in Great Baddow in March 2006. The dilemma was if we could estimate the premium could be to extend the lease by ninety years. Similar flats in Great Baddow with 100 year plus lease were in the region of £265,000. The mid-range ground rent payable was £50 invoiced every twelve months. The lease lapsed in 2098. Having 73 years left we estimated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.
In 2012 we were contacted by Dr G André who, having moved into a first floor flat in Great Baddow in October 1997. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparable premises in Great Baddow with 100 year plus lease were worth £264,000. The average amount of ground rent was £60 collected annually. The lease expiry date was in 2078. Given that there were 53 years unexpired we approximated the compensation to the landlord to extend the lease to be between £37,100 and £42,800 not including fees.