Leven residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
Leasehold residencies in Leven with more than 100 years unexpired on the lease are sometimes 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 upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Leven 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 lawyer we work with provide it.
Subsequent to lengthy discussions with the freeholder of her ground floor apartment in Leven, Amy started the lease extension process as the 80 year threshold was fast nearing. The legal work was finalised in September 2015. The landlord’s costs were negotiated to about 500 pounds.
Last year we were contacted by Mr and Mrs. D Sharif , who completed a one bedroom flat in Leven in October 2010. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by 90 years. Similar premises in Leven with an extended lease were valued about £200,800. The mid-range amount of ground rent was £65 invoiced per annum. The lease concluded on 6 May 2085. Considering the 60 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £20,900 and £24,200 exclusive of legals.
Ms V Ward bought a one bedroom flat in Leven in September 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Comparable homes in Leven with a long lease were worth £255,000. The mid-range ground rent payable was £50 invoiced monthly. The lease termination date was on 6 November 2096. Considering the 71 years as a residual term we calculated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus fees.