Unfortunately that a Billesdon residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Billesdon property market.Once your lease gets to 85ish years, you need to start thinking about 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 slips under 80 years - otherwise a higher premium will be payable. The majority of leasehold owners in Billesdon will be able to extend under the legislation; however a conveyancer should be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Billesdon with in excess of 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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 lawyers that we work with undertake Billesdon 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 lawyer we work with provide it.
Callum owned a 2 bedroom flat in Billesdon on the market with a lease of just over sixty years outstanding. Callum informally spoke with his landlord being 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 on the basis of a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Callum to exercise his statutory right. Callum obtained expert advice and secured an acceptable deal informally and sell the flat.
Mr A Miller purchased a garden apartment in Billesdon in February 2005. The dilemma was if we could approximate the compensation to the landlord could be to extend the lease by an additional years. Identical properties in Billesdon with 100 year plus lease were worth £193,400. The average amount of ground rent was £65 invoiced quarterly. The lease concluded on 18 April 2085. Given that there were 59 years left we calculated the premium to the landlord to extend the lease to be between £21,900 and £25,200 plus costs.
Last month we were e-mailed by Mr A Nelson , who acquired a studio flat in Billesdon in May 2012. The question was if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparative homes in Billesdon with a long lease were in the region of £255,000. The average ground rent payable was £50 collected annually. The lease lapsed in 2096. Having 70 years outstanding we calculated the premium to the freeholder to extend the lease to be within £10,500 and £12,000 exclusive of fees.