It’s a harsh certainty that a Leconfield residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Leconfield property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher premium will be payable. The majority of leasehold owners in Leconfield will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for many years in the future.
| 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 are not acceptable. 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; |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Leconfield,the lease extension lawyers 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 Leconfield valuers.
Lucas was the the leasehold owner of a high value flat in Leconfield being marketed with a lease of a little over sixty years outstanding. Lucas on an informal basis approached his freeholder a well known London-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Lucas to invoke his statutory right. Lucas procured expert legal guidance and was able to make a more informed decision and deal with the matter and sell the property.
Last year we were e-mailed by Mrs W Cox , who took over the lease of a studio apartment in Leconfield in May 1999. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Comparative residencies in Leconfield with a long lease were worth £193,400. The average amount of ground rent was £65 invoiced quarterly. The lease expiry date was in 2085. Considering the 59 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £21,900 and £25,200 plus professional charges.
In 2013 we were contacted by Mr and Mrs. H Ali who, having purchased a ground floor apartment in Leconfield in August 2011. We are asked if we could estimate the premium could be to prolong the lease by an additional years. Comparative premises in Leconfield with a long lease were in the region of £250,000. The average ground rent payable was £50 billed every twelve months. The lease terminated in 2096. Considering the 70 years remaining we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including costs.