It’s an underpublicised truth that a Tibshelf residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Tibshelf property market.Once your lease gets to 85ish years, 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 below 80 years - otherwise a higher amount will be due. Most flat owners in Tibshelf will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Tibshelf with in excess of 100 years outstanding on the lease are sometimes 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 upside in buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Tibshelf,the lease extension solicitors 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 Tibshelf valuers.
In recent months Finn, came very close to the eighty-year threshold with the lease on his purpose- built flat in Tibshelf. In buying his home 19 years previously, the length of the lease was of no relevance. Luckily, he recognised he would imminently be paying way over the odds for Extending the lease. Finn extended the lease at the eleventh hour last July. Finn and the freeholder subsequently settled on a premium of £5,500 . If the lease had fallen lower than eighty years, the amount would have become more costly by at least £1,025.
Last month we were called by Mr Luke Bell , who moved into a basement flat in Tibshelf in May 2012. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Similar homes in Tibshelf with 100 year plus lease were valued around £171,800. The average ground rent payable was £55 invoiced quarterly. The lease came to a finish on 15 November 2076. Having 50 years remaining we estimated the premium to the freeholder for the lease extension to be within £33,300 and £38,400 plus costs.
In 2012 we were e-mailed by Mrs Ellen Brown who, having moved into a garden apartment in Tibshelf in July 2003. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Comparative properties in Tibshelf with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 collected yearly. The lease concluded on 9 July 2096. Having 70 years unexpired we calculated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 not including fees.