Upminster leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Upminster residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Upminster you must investigate if your lease has between seventy and ninety years remaining. There are good reasons why a Upminster flat owner with a lease having around 80 years remaining should take steps to make sure that a lease extension is effected without delay
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Upminster,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Upminster valuers.
Jacob owned a studio apartment in Upminster on the market with a lease of fraction over 72 years left. Jacob informally spoke with his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jacob to invoke his statutory right. Jacob obtained expert advice and was able to make a more informed judgement and handle with the matter and sell the flat.
Last Christmas we were called by Mr Ali Thomas , who purchased a studio flat in Upminster in July 2011. The dilemma was if we could approximate the price would be for a 90 year extension to my lease. Identical properties in Upminster with 100 year plus lease were valued around £205,000. The average ground rent payable was £50 invoiced annually. The lease expired on 3 March 2105. Considering the 79 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of costs.
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 related to 1 flat. The unexpired term was 57.5 years.