It’s a harsh truth that a Bloxham residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Bloxham property prices.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 lower than eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Bloxham will be able to extend under the legislation; however a lawyer should be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
It is generally considered that a property with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service gives you enhanced control over the value of your Bloxham leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last year Liam, came seriously close to the 80-year threshold with the lease on his two bedroom flat in Bloxham. In buying his flat two decades ago, the lease term was of little relevance. Luckily, he realised he needed to take action soon on Extending the lease. Liam extended the lease just ahead of time last September. Liam and the freeholder via the management company eventually settled on the final figure of £5,000 . If he had missed the deadline, the amount would have become more costly by at least £975.
Mr L Allen completed a basement flat in Bloxham in January 2010. We are asked if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Identical flats in Bloxham with 100 year plus lease were in the region of £265,000. The average amount of ground rent was £50 collected annually. The lease terminated in 2099. Having 74 years unexpired we approximated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
In 2012 we were e-mailed by Mr K Baker who, having owned a first floor apartment in Bloxham in May 1998. The dilemma was if we could estimate the price would be for a ninety year lease extension. Comparative premises in Bloxham with a long lease were valued about £166,400. The mid-range amount of ground rent was £60 collected per annum. The lease elapsed on 20 August 2079. Given that there were 54 years left we estimated the compensation to the freeholder for the lease extension to be between £32,300 and £37,400 plus fees.