It’s a harsh truth that a Buckingham residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Buckingham property market.Once your lease gets to 85ish years, you need to 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 under eighty years - otherwise a higher premium will be due. The majority of leasehold owners in Buckingham will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 45 years left, the property will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| 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:
|
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Buckingham,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Buckingham valuers.
Last year Alex, came very close to the 80-year threshold with the lease on his two bedroom flat in Buckingham. Having bought his property two decades ago, the lease term was of minimal relevance. by good luck, he became aware that he needed to take action soon on Extending the lease. Alex extended the lease just in the nick of time last January. Alex and the landlord who owned the flat above ultimately settled on an amount of £5,500 . If he not met the deadline, the sum would have increased by at least £850.
Mr and Mrs. D Bailey took over the lease of a newly refurbished flat in Buckingham in July 1995. We are asked if we could approximate the premium would be to extend the lease by ninety years. Comparative properties in Buckingham with an extended lease were in the region of £280,000. The average amount of ground rent was £55 collected quarterly. The lease concluded on 1 November 2104. Taking into account 78 years outstanding we estimated the premium to the landlord for the lease extension to be between £13,300 and £15,400 plus costs.
In 2011 we were e-mailed by Mr and Mrs. I Garcia who, having was assigned a lease of a basement flat in Buckingham in March 1998. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparable homes in Buckingham with an extended lease were worth £183,600. The average ground rent payable was £65 invoiced per annum. The lease ended on 6 April 2083. Considering the 57 years outstanding we estimated the compensation to the landlord for the lease extension to be between £28,500 and £33,000 plus legals.