For those whose Kirkby In Furness home is held on a long lease, our message is clear – if you ignore the situation, your property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Kirkby In Furness,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Kirkby In Furness valuers.
Felix was the the leasehold owner of a studio flat in Kirkby In Furness on the market with a lease of just over 61 years remaining. Felix on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Felix to invoke his statutory right. Felix procured expert legal guidance and was able to make an informed judgement and deal with the matter and readily saleable.
Last year we were contacted by Ms V Khan , who bought a recently refurbished flat in Kirkby In Furness in August 1996. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar premises in Kirkby In Furness with a long lease were worth £168,800. The mid-range amount of ground rent was £60 collected annually. The lease ran out on 21 March 2079. Considering the 55 years outstanding we calculated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 not including professional charges.
In 2011 we were approached by Mr and Mrs. D Patel who, having owned a garden flat in Kirkby In Furness in September 2000. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Similar homes in Kirkby In Furness with 100 year plus lease were in the region of £235,200. The average ground rent payable was £45 collected quarterly. The lease expired in 2090. Considering the 66 years as a residual term we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.