Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will ordinarily be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Arnside. Inevitably, the length of lease left reduces over time. This may slip by relatively unnoticed when the property needs to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more it will cost to procure a lease extension. Eligible leaseholders in Arnside have the legal entitlement to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. You should give due consideration before delaying your Arnside lease extension. Holding off the cost now likely increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Engaging our service will provide you increased control over the value of your Arnside leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to lengthy discussions with the landlord of her ground floor apartment in Arnside, Katherine initiated the lease extension process just as her lease was coming close to the all-important 80-year deadline. The transaction completed in October 2015. The landlord’s costs were kept to an absolute minimum.
In 2012 we were e-mailed by Dr D Carter who, having completed a studio apartment in Arnside in October 2012. The question was if we could approximate the compensation to the landlord could be to prolong the lease by an additional years. Identical properties in Arnside with a long lease were in the region of £290,000. The average ground rent payable was £45 collected every twelve months. The lease elapsed on 20 September 2098. Taking into account 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 not including professional charges.
Mr and Mrs. T Phillips moved into a basement flat in Arnside in June 1998. The question was if we could estimate the premium could be to extend the lease by 90 years. Comparative premises in Arnside with an extended lease were worth £240,600. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed on 3 May 2087. Taking into account 62 years outstanding we calculated the premium to the landlord to extend the lease to be within £21,900 and £25,200 plus expenses.