With a long leasehold property in Highnam, you are actually buying an entitlement to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you may consider a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly when there are fewer than 80 years left. Residents in Highnam with a lease approaching 81 years unexpired should seriously consider extending it without delay. Once the lease term has below eighty years outstanding, under the relevant legislation the freeholder is entitled to calculate and levy a larger premium, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold properties in Highnam with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Highnam 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.
Last year Theo, started to get close to the 80-year threshold with the lease on his garden apartment in Highnam. Having bought his home two decades ago, the unexpired term was of minimal concern. Luckily, he noticed he needed to take action soon on a lease extension. Theo was able to extend his lease just under the wire last April. Theo and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If he had missed the deadline, the amount would have become more exhorbitant by at least £1,050.
Mr K Fournier completed a purpose-built apartment in Highnam in August 2012. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Similar properties in Highnam with an extended lease were valued about £205,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished on 16 August 2104. Given that there were 79 years outstanding we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including professional charges.
Dr K Rose moved into a first floor flat in Highnam in October 2009. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Similar residencies in Highnam with a long lease were worth £275,000. The mid-range amount of ground rent was £65 billed monthly. The lease ended in 2093. Taking into account 68 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 exclusive of expenses.