Unfortunately that a Potton residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Potton property prices.Where your lease has approximately ninety years left, you need to 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 dips under eighty years - otherwise a higher premium will be payable. Most leasehold owners in Potton will be able to extend under the legislation; however a lawyer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the property 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Potton,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Potton valuers.
In 2014 Hugo, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Potton. In buying his home two decades ago, the unexpired term was of minimal interest. As luck would have it, he realised he would soon be paying way over the odds for a lease extension. Hugo extended the lease just in the nick of time last September. Hugo and the freeholder via the management company subsequently settled on sum of £5,000 . If the lease had fallen lower than 80 years, the sum would have escalated by a minimum £1,075.
Dr Y François was assigned a lease of a purpose-built apartment in Potton in September 2003. The dilemma was if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Identical homes in Potton with a long lease were valued around £191,400. The average amount of ground rent was £55 invoiced annually. The lease concluded in 2080. Having 54 years left we approximated the premium to the freeholder for the lease extension to be between £34,200 and £39,600 not including professional charges.
Mr and Mrs. H López purchased a first floor apartment in Potton in April 1996. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by ninety years. Similar premises in Potton with 100 year plus lease were valued around £295,000. The mid-range amount of ground rent was £45 billed annually. The lease elapsed on 21 June 2100. Considering the 74 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus costs.