On the balance of probabilities where you own a flat in Biddenham you actually own a long leasehold interest over your property
Leasehold residencies in Biddenham with in excess of 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancers that we work with undertake Biddenham 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.
Last Autumn Jackson, started to get near to the 80-year threshold with the lease on his studio apartment in Biddenham. Having bought his property two decades ago, the length of the lease was of minimal significance. Luckily, he recognised he would imminently be paying an escalated premium for a lease extension. Jackson was able to extend his lease just under the wire last July. Jackson and the landlord subsequently agreed on the final figure of £6,000 . If he had missed the deadline, the amount would have increased by a minimum £975.
In 2011 we were approached by Mr M Ricardo who, having bought a purpose-built apartment in Biddenham in February 2002. We are asked if we could estimate the price would likely be to extend the lease by ninety years. Comparable flats in Biddenham with an extended lease were valued about £242,600. The average amount of ground rent was £45 invoiced monthly. The lease ended on 4 May 2093. Taking into account 67 years outstanding we approximated the premium to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of professional charges.
In 2014 we were contacted by Mr and Mrs. F Stewart who, having took over the lease of a ground floor flat in Biddenham in September 2002. The question was if we could estimate the premium would be to extend the lease by 90 years. Similar flats in Biddenham with 100 year plus lease were in the region of £280,000. The mid-range ground rent payable was £55 invoiced annually. The lease concluded in 2104. Having 78 years outstanding we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.