For anyone whose Abridge flat is held on a long lease, our message is clear – if nothing is done, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more it will cost to obtain a lease extension.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| 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 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; |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancing solicitors that we work with handle Abridge 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.
Last year Jasper, came dangerously near to the 80-year mark with the lease on his first floor flat in Abridge. Having purchased his property two decades ago, the unexpired term was of little interest. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Jasper arranged for a lease extension at the eleventh hour last June. Jasper and the freeholder via the management company subsequently agreed on an amount of £6,000 . If he had missed the deadline, the sum would have gone up by a minimum £1,125.
In 2014 we were e-mailed by Mr and Mrs. T Dupont who, having was assigned a lease of a first floor apartment in Abridge in August 2008. We are asked if we could approximate the price would be for a 90 year lease extension. Comparable residencies in Abridge with a long lease were in the region of £270,000. The mid-range ground rent payable was £55 collected yearly. The lease terminated in 2100. Considering the 75 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus expenses.
An example of a Freehold Enfranchisement decision for a Abridge residence is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case related to 2 flats. The number of years remaining on the existing lease(s) was 69.26 years.