On the balance of probabilities if you own a flat in Repton you actually own a long leasehold interest over your property
It is generally considered that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
| Yorkshire 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. |
The conveyancing solicitors that we work with undertake Repton 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.
14 months ago Charlie, started to get near to the 80-year mark with the lease on his garden flat in Repton. In buying his home twenty years previously, the unexpired term was of little concern. Luckily, he became aware that he would imminently be paying way over the odds for Extending the lease. Charlie extended the lease just ahead of time last March. Charlie and the freeholder eventually settled on a premium of £5,500 . If the lease had fallen lower than 80 years, the premium would have escalated by at least £1,050.
In 2014 we were phoned by Dr N Harris who, having bought a ground floor flat in Repton in June 2003. The dilemma was if we could estimate the price would be to prolong the lease by ninety years. Comparative premises in Repton with an extended lease were in the region of £225,400. The average amount of ground rent was £45 collected quarterly. The lease finished in 2089. Given that there were 64 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £16,200 and £18,600 not including professional charges.
Last Summer we were e-mailed by Mr Alex Vincent , who owned a newly refurbished flat in Repton in April 1998. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparative homes in Repton with an extended lease were valued around £270,000. The mid-range ground rent payable was £55 collected monthly. The lease terminated in 2100. Given that there were 75 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of costs.