Banbury leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. Legislation has been in place for sometime now which entitles qualifying Banbury residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Banbury you should investigate if your lease has between seventy and 90 years left. There are compelling reasons why a Banbury flat owner with a lease having around 80 years unexpired should take action to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you increased control over the value of your Banbury leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Finley was the the leasehold owner of a studio flat in Banbury on the market with a lease of a little over 59 years remaining. Finley informally approached his freeholder a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Finley to exercise his statutory right. Finley obtained expert legal guidance and secured an acceptable resolution informally and readily saleable.
Last month we were contacted by Dr Y Taylor , who completed a garden flat in Banbury in October 1998. We are asked if we could estimate the premium would be for a 90 year lease extension. Comparable homes in Banbury with 100 year plus lease were worth £216,000. The average ground rent payable was £60 invoiced quarterly. The lease finished on 10 October 2084. Considering the 58 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 not including professional charges.
Last Summer we were approach by Mr and Mrs. V Norbert , who moved into a garden flat in Banbury in April 2005. We are asked if we could shed any light on how much (roughly) price would be for a ninety year extension to my lease. Comparative residencies in Banbury with an extended lease were worth £205,000. The average ground rent payable was £50 collected per annum. The lease expired on 11 February 2105. Taking into account 79 years unexpired we approximated the premium to the freeholder for the lease extension to be between £7,600 and £8,800 plus costs.