If you are facing a significant premium because your lease in Leven has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Main reasons to commence your Leven lease extension today:
A Leven leasehold property depreciates with the years remaining on the lease.
Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Leven. Inevitably, the term of lease left shortens over time. This may pass by relatively unnoticed when the residence needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Leven have the legal entitlement to extend the lease for an additional 90 years in accordance with legislation. Please give careful consideration before delaying your Leven lease extension. Holding off the cost now only increases the price you will eventually have to pay to extend your lease
An extended lease is almost the same value as a freehold
Leasehold premises in Leven with more than 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
Banks and Building Societies may decide not to finance a property with a short lease
Most mortgage lenders have narrowed their lending criteria in the last ten years and borrowers are finding it increasingly difficult to raise funding or re-mortgage against property with shorter lease terms, particularly under 75 years as they are deemed to be unacceptable security.
| Lender |
Requirement
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| 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.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| 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
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| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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Why use us for your lease extension in Leven?
Irrespective of whether you are a tenant or a landlord in Leven,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Leven valuers.
Leven Lease Extension Case Studies:
Max, Leven, East Yorkshire,
Max owned a high value apartment in Leven on the market with a lease of fraction over 61 years unexpired. Max on an informal basis spoke with his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Max to exercise his statutory right. Max obtained expert advice and secured satisfactory deal informally and sell the property.
Leven case:
Mr and Mrs. I Williams bought a one bedroom flat in Leven in April 2005. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparable residencies in Leven with a long lease were in the region of £255,000. The mid-range ground rent payable was £50 invoiced per annum. The lease finished on 24 November 2097. Having 71 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 not including professional charges.
Leven case:
Last July we were approach by Mrs P Turner , who
purchased a recently refurbished apartment in Leven in February 1999. We are asked if we could approximate the price would likely be for a 90 year extension to my lease. Comparative residencies in Leven with an extended lease were worth £254,200. The mid-range ground rent payable was £60 billed monthly. The lease concluded in 2077. Taking into account 51 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £43,700 and £50,600 not including fees.