Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Botley. Inevitably, the period of lease left shortens as time goes by. This may pass by relatively unnoticed when the flat or house needs to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease. Eligible leaseholders in Botley have the legal entitlement to extend the lease for a further ninety years in accordance with the 1993 Leasehold Reform Act. Do give careful consideration before delaying your Botley lease extension. Putting off that expense now simply increases the price you will ultimately have to pay to extend your lease
Leasehold premises in Botley with in excess of one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 procure Botley 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.
Following lengthy negotiations with the landlord of her ground floor apartment in Botley, Kirsty started the lease extension process just as the lease was nearing the all-important 80-year threshold. The lease extension was finalised in July 2009. The freeholder’s fees were restricted to under 550 pounds.
Last year we were approach by Ms Sarah Hill , who owned a ground floor flat in Botley in September 1998. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by a further 90 years. Similar flats in Botley with a long lease were valued about £280,000. The average amount of ground rent was £55 billed yearly. The lease came to a finish on 28 January 2102. Considering the 77 years remaining we calculated the premium to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of expenses.
Last Autumn we were approach by Mr Y Martínez , who acquired a studio flat in Botley in June 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Comparative homes in Botley with 100 year plus lease were in the region of £183,600. The mid-range amount of ground rent was £65 invoiced quarterly. The lease expiry date was on 9 July 2082. Considering the 57 years outstanding we estimated the premium to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of costs.