Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Todmorden. Inevitably, the length of lease left reduces as time goes by. This is often ignored and only raises itself as an issue when the flat or house has to be sold or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Eligible long lease owners in Todmorden have the legal entitlement to extend the lease for an additional 90 years in accordance with the 1993 Leasehold Reform Act. Please give careful consideration before delaying your Todmorden lease extension. Putting off the cost now likely increases the price you will ultimately have to pay to extend your lease
It is conventional wisdom that a property with over 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises 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 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Todmorden 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 conveyancing solicitor we work with provide it.
Last year Michael, came precariously near to the eighty-year mark with the lease on his first floor flat in Todmorden. Having bought his property 18 years previously, the lease term was of minimal interest. Thankfully, it dawned on him that he would soon be paying an escalated premium for Extending the lease. Michael extended the lease at the eleventh hour in March. Michael and the freeholder via the managing agents ultimately agreed on sum of £5,000 . If he failed to meet the deadline, the price would have become more exhorbitant by a minimum £1,000.
Ms F Brown acquired a first floor apartment in Todmorden in October 1998. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Similar residencies in Todmorden with a long lease were worth £250,400. The average amount of ground rent was £65 collected yearly. The lease lapsed in 2090. Having 64 years left we calculated the compensation to the freeholder to extend the lease to be within £19,000 and £22,000 plus legals.
In 2011 we were phoned by Dr V Davies who, having moved into a studio apartment in Todmorden in November 2002. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative residencies in Todmorden with a long lease were worth £189,000. The average ground rent payable was £55 invoiced per annum. The lease elapsed in 2079. Taking into account 53 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.