Temple Fortune leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Temple Fortune residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Temple Fortune you really ought to see if your lease has between 70 and ninety years left. There are good reasons why a Temple Fortune 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 Temple Fortune with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Temple Fortune,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Temple Fortune valuers.
Dylan was the the leasehold owner of a studio flat in Temple Fortune being sold with a lease of a few days over 72 years unexpired. Dylan informally spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £50 per annum. No ground rent would be due on a lease extension were Dylan to exercise his statutory right. Dylan obtained expert advice and secured an acceptable deal informally and sell the flat.
In 2009 we were approached by Mr and Mrs. W Howard who, having acquired a ground floor flat in Temple Fortune in May 2009. The question was if we could approximate the price would likely be to prolong the lease by a further 90 years. Comparable residencies in Temple Fortune with a long lease were worth £295,000. The average ground rent payable was £45 invoiced yearly. The lease expired on 5 October 2100. Taking into account 74 years remaining we approximated the premium to the landlord to extend the lease to be within £8,600 and £9,800 not including fees.
An example of a Lease Extension matter before the tribunal for a Temple Fortune flat is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case was in relation to 1 flat. The unexpired residue of the current lease was 76 years.