Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Verwood. Clearly, the term of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the residence needs to be disposed of or refinanced. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Eligible long lease owners in Verwood have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give careful deliberation before delaying your Verwood lease extension. Putting off that expense now only increases the price you will ultimately incur for a lease extension
Leasehold premises in Verwood with in excess of one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service will provide you enhanced control over the value of your Verwood leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of eight months of protracted correspondence with the landlord of her one bedroom apartment in Verwood, Ellie initiated the lease extension process just as the lease was approaching the crucial eighty-year deadline. The lease extension was finalised in November 2010. The freeholder’s costs were kept to an absolute minimum.
Last Christmas we were called by Mr and Mrs. L Ramírez , who was assigned a lease of a ground floor flat in Verwood in August 2003. The dilemma was if we could estimate the price would likely be for a 90 year lease extension. Similar properties in Verwood with 100 year plus lease were worth £250,000. The average amount of ground rent was £50 invoiced every twelve months. The lease terminated in 2094. Considering the 68 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £10,500 and £12,000 exclusive of expenses.
Ms Laura Phillips acquired a first floor apartment in Verwood in June 1995. The dilemma was if we could approximate the premium would be to extend the lease by 90 years. Comparative premises in Verwood with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 billed quarterly. The lease concluded in 2105. Taking into account 79 years left we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including expenses.