It’s a harsh truth that a Balby residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Balby property market.Once your lease gets to 85ish years, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips under eighty years - otherwise a higher premium will be due. The majority of flat owners in Balby will be able to extend under the legislation; however a lawyer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold premises in Balby with in excess of 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| 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 lawyers that we work with handle Balby 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.
Twenty four months ago Kyle, came dangerously near to the 80-year mark with the lease on his first floor flat in Balby. In buying his home two decades ago, the lease term was of little relevance. Fortunately, he became aware that he would imminently be paying an inflated amount for a lease extension. Kyle was able to extend his lease just under the wire in March. Kyle and the landlord in the end agreed on the final figure of £6,000 . If the lease had dipped lower than 80 years, the price would have become more costly by a minimum £1,150.
Last Summer we were called by Ms D Clark , who took over the lease of a newly refurbished apartment in Balby in April 2005. The question was if we could approximate the premium could be for a 90 year lease extension. Comparative residencies in Balby with a long lease were valued about £256,600. The mid-range ground rent payable was £60 billed yearly. The lease elapsed in 2077. Given that there were 52 years unexpired we estimated the compensation to the landlord for the lease extension to be within £41,800 and £48,400 not including fees.
In 2010 we were phoned by Dr Owen Petit who, having took over the lease of a first floor flat in Balby in January 2008. We are asked if we could estimate the price could be for a 90 year lease extension. Comparable flats in Balby with an extended lease were valued around £218,000. The average amount of ground rent was £45 collected quarterly. The lease elapsed on 23 September 2088. Having 63 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £17,100 and £19,800 exclusive of professional charges.