Upminster leases on domestic properties are gradually losing value. if your lease has in the region of 90 years unexpired, you should start thinking about a lease extension. Eighty years is a significant number: when the remaining term of a lease dips below this level then you begin incurring an additional element called marriage value. Leasehold owners in Upminster will mostly be legally entitled to a lease extension; however a solicitor will confirm if you qualify. In certain circumstances you may not be entitled. There are prescribed deadlines and steps to follow once the process has started so it’s sensible to be guided by a conveyancer during the process.
Leasehold properties in Upminster with more than 100 years outstanding on the lease are sometimes referred to as ‘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 to be gained by purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with undertake Upminster 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 conveyancer we work with provide it.
Sebastian owned a studio flat in Upminster being marketed with a lease of just over 61 years unexpired. Sebastian on an informal basis spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were Sebastian to invoke his statutory right. Sebastian procured expert advice and was able to make an informed decision and deal with the matter and sell the flat.
Mr T Smith purchased a garden flat in Upminster in June 2007. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparable residencies in Upminster with an extended lease were valued around £206,200. The average amount of ground rent was £60 billed annually. The lease ran out in 2082. Having 56 years outstanding we approximated the premium to the freeholder for the lease extension to be between £31,400 and £36,200 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Upminster premises is 37 Lodge Court High Street in November 2013. the decision of the LVT was that the premium to be paid for the new lease was £25,559 This case affected 1 flat. The unexpired term as at the valuation date was 57.5 years.