Owning a apartment usually means owning a lease of the property, which has a finite term of years. This lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Walkden. Clearly, the length of lease left reduces over time. This is often ignored and only becomes a problem when the residence needs to be sold or refinanced. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Qualifying long lease owners in Walkden have the legal entitlement to extend the lease for an additional 90 years under Leasehold Reform legislation. Please give careful consideration before delaying your Walkden lease extension. Putting off that expense now only increases the price you will ultimately have to pay to extend your lease
It is generally accepted that a property with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| 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. |
| 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 |
The conveyancing solicitors that we work with handle Walkden 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.
Two years ago Reuben, started to get near to the 80-year threshold with the lease on his garden apartment in Walkden. In buying his flat two decades ago, the lease term was of little relevance. by good luck, it dawned on him that he would soon be paying way over the odds for Extending the lease. Reuben arranged for a lease extension at the eleventh hour last August. Reuben and the freeholder eventually settled on the final figure of £6,000 . If he had missed the deadline, the amount would have escalated by at least £1,025.
Ms Abigail Howard moved into a ground floor flat in Walkden in March 2002. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical homes in Walkden with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 invoiced annually. The lease expiry date was on 26 February 2103. Given that there were 77 years outstanding we approximated the premium to the freeholder to extend the lease to be within £13,300 and £15,400 plus costs.
Dr Y Martin bought a first floor apartment in Walkden in May 2000. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Similar flats in Walkden with an extended lease were worth £183,600. The mid-range ground rent payable was £65 invoiced every twelve months. The lease ended in 2083. Taking into account 57 years unexpired we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including fees.