Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Sneyd Park. Clearly, the term of lease remaining shortens over time. This is often ignored and only becomes a problem when the flat or house needs to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Sneyd Park have the right to extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Please give careful deliberation before delaying your Sneyd Park lease extension. Putting off that expense now simply increases the price you will eventually incur to extend your lease
Leasehold residencies in Sneyd Park with more than 100 years outstanding 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Engaging our service gives you better control over the value of your Sneyd Park leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Twenty four months ago Arthur, came critically near to the eighty-year threshold with the lease on his basement flat in Sneyd Park. In buying his property 18 years ago, the unexpired term was of little relevance. Fortunately, he recognised he would soon be paying an inflated amount for Extending the lease. Arthur arranged for a lease extension just under the wire in April. Arthur and the landlord who owned the flat above subsequently agreed on sum of £6,000 . If the lease had dropped below eighty years, the sum would have gone up by a minimum £975.
In 2011 we were approached by Mr and Mrs. V Martínez who, having was assigned a lease of a newly refurbished apartment in Sneyd Park in March 2004. We are asked if we could approximate the premium would be for a ninety year lease extension. Similar homes in Sneyd Park with a long lease were in the region of £210,000. The average ground rent payable was £50 billed every twelve months. The lease ended in 2105. Considering the 80 years left we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 not including professional charges.
Mr and Mrs. R Bailey bought a basement apartment in Sneyd Park in April 2012. The question was if we could approximate the premium could be to prolong the lease by ninety years. Comparable residencies in Sneyd Park with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £45 collected per annum. The lease ended in 2094. Given that there were 69 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of fees.