Greenfield leases on domestic deteriorating in value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to be in place before the term of the current lease drops below eighty years - otherwise a higher amount will be payable. Flat owners in Greenfield will mostly be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In some circumstances you may not be entitled. There are also strict deadlines and procedures to follow once the process is initiated so it’s best to be guided by a conveyancing solicitor during the process.
Leasehold properties in Greenfield with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. 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 |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you enhanced control over the value of your Greenfield leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Leo, came perilously close to the 80-year threshold with the lease on his one bedroom flat in Greenfield. Having bought his flat two decades ago, the length of the lease was of no importance. Thankfully, it dawned on him that he would soon be paying way over the odds for a lease extension. Leo arranged for a lease extension just ahead of time last May. Leo and the landlord who owned the flat above eventually settled on the final figure of £5,500 . If the lease had fallen below 80 years, the figure would have escalated by a minimum £925.
Last Christmas we were e-mailed by Dr Teddy Roberts , who owned a one bedroom flat in Greenfield in March 1995. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to prolong the lease by ninety years. Identical flats in Greenfield with 100 year plus lease were worth £193,400. The mid-range amount of ground rent was £65 billed monthly. The lease terminated on 23 May 2085. Given that there were 59 years remaining we approximated the compensation to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of costs.
Last Spring we were called by Mr V Green , who acquired a one bedroom apartment in Greenfield in November 2006. The question was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Identical flats in Greenfield with 100 year plus lease were worth £255,000. The average ground rent payable was £50 invoiced monthly. The lease ran out on 9 July 2096. Considering the 70 years left we approximated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.