On the balance of probabilities where you own a flat in Acrefair you actually own a long leasehold interest over your property
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| Yorkshire 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. |
The conveyancing solicitors that we work with procure Acrefair 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.
In the wake of 9 months of unsuccessful negotiations with the freeholder of her garden flat in Acrefair, Ellie initiated the lease extension process just as the lease was coming close to the crucial eighty-year mark. The lease extension completed in October 2011. The landlord’s charges were kept to an absolute minimum.
Dr J Robinson owned a ground floor flat in Acrefair in November 2001. We are asked if we could estimate the price would likely be for a ninety year lease extension. Identical residencies in Acrefair with 100 year plus lease were in the region of £285,000. The average amount of ground rent was £55 billed annually. The lease expiry date was on 17 October 2105. Having 79 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of costs.
In 2012 we were phoned by Mr and Mrs. B Bailey who, having owned a one bedroom apartment in Acrefair in January 2010. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by an additional years. Comparative homes in Acrefair with an extended lease were worth £193,400. The mid-range amount of ground rent was £65 invoiced quarterly. The lease terminated in 2085. Taking into account 59 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £21,900 and £25,200 not including costs.