Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Berkhamsted. Clearly, the period of lease remaining reduces as time goes by. This is often ignored and only becomes a problem when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Berkhamsted have the legal entitlement to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Do give careful deliberation before putting off your Berkhamsted lease extension. Holding off the cost now only increases the price you will ultimately have to pay to extend your lease
Leasehold residencies in Berkhamsted with over 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | 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 be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 conveyancing solicitors that we work with handle Berkhamsted 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 conveyancing solicitor we work with provide it.
Off the back of protracted discussions with the freeholder of her basement apartment in Berkhamsted, Jodie commenced the lease extension process as the 80 year mark was rapidly advancing. The lease extension was finalised in March 2014. The freeholder’s costs were negotiated to a tad over 600 GBP.
Last Spring we were called by Mr C Walker , who moved into a one bedroom apartment in Berkhamsted in November 2011. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative premises in Berkhamsted with an extended lease were valued about £280,000. The average ground rent payable was £55 collected per annum. The lease expired on 21 November 2104. Given that there were 78 years unexpired we approximated the compensation to the landlord for the lease extension to be between £13,300 and £15,400 exclusive of professional charges.
Mr and Mrs. I Carter completed a one bedroom apartment in Berkhamsted in June 2008. The question was if we could estimate the premium could be for a ninety year lease extension. Comparable homes in Berkhamsted with 100 year plus lease were worth £191,000. The average ground rent payable was £65 invoiced yearly. The lease termination date was on 19 September 2084. Considering the 58 years outstanding we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 plus expenses.