Patcham leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Patcham tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Patcham you must see if your lease has between 70 and ninety years left. There are compelling reasons why a Patcham leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold properties in Patcham with more than one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you better control over the value of your Patcham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Kyle owned a studio flat in Patcham being marketed with a lease of a little over fifty eight years remaining. Kyle informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Kyle to exercise his statutory right. Kyle obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Ms Alice Alexander purchased a one bedroom apartment in Patcham in May 2011. We are asked if we could estimate the price could be to extend the lease by ninety years. Comparative flats in Patcham with a long lease were valued around £176,200. The mid-range amount of ground rent was £65 billed per annum. The lease concluded in 2080. Taking into account 56 years left we estimated the compensation to the landlord for the lease extension to be within £29,500 and £34,000 exclusive of expenses.
Last Autumn we were contacted by Dr P Brown , who purchased a ground floor apartment in Patcham in April 1996. The dilemma was if we could estimate the premium would likely be to prolong the lease by ninety years. Comparable flats in Patcham with a long lease were in the region of £237,600. The mid-range ground rent payable was £45 billed quarterly. The lease terminated in 2091. Considering the 67 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £11,400 and £13,200 exclusive of legals.