If you are facing a significant premium because your lease in Buckingham has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
Increase your lease and increase your Buckingham property value
Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Buckingham. Clearly, the period of lease left shortens as time goes by. This may pass by relatively unnoticed when the property needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Buckingham have the legal entitlement to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give careful attention before putting off your Buckingham lease extension. Holding off the cost now simply increases the price you will ultimately incur to extend your lease
Buckingham property with a lease extension is almost the same value as a freehold
Leasehold premises in Buckingham with over 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges warrant it.
Mortgage lenders may decide not to loan monies on a short lease
Most mortgage lenders insist on a lengthy amount of time remaining on a leasehold residence before they will contemplate it as adequate security. Even if you don't require a mortgage, you should keep in mind that it is probable that someone intending to purchase your property in the future might well do, so where they can't secure a mortgage, then the financial worth of the property could suffer. Since 2008 many banks and building societies have increased the required minimum lease length that they are willing to lend on
| Lender |
Requirement
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|---|
| Barnsley Building Society |
60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term.
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| Birmingham Midshires |
Minimum 70 years from the date of the mortgage.
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| Nationwide Building Society |
- Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges
For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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| 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.
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What makes us experts in Buckingham lease extensions?
Irrespective of whether you are a tenant or a freeholder in Buckingham,the lease extension solicitors that we work with will always be willing 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.
Buckingham Lease Extension Example Cases:
Ollie, Buckingham, Buckinghamshire
Half a year ago Ollie, came seriously close to the eighty-year threshold with the lease on his garden flat in Buckingham. Having purchased his flat twenty years previously, the unexpired term was of little interest. by good luck, it dawned on him that he needed to take action soon on a lease extension. Ollie was able to extend his lease just under the wire in January. Ollie and the freeholder ultimately agreed on an amount of £6,000 . If he not met the deadline, the sum would have increased by at least £1,100.
Buckingham case:
Last Autumn we were approach by Dr B Patel , who
was assigned a lease of a first floor flat in Buckingham in May 1997. The question was if we could estimate the premium would likely be for a 90 year extension to my lease. Identical premises in Buckingham with 100 year plus lease were in the region of £232,800. The mid-range amount of ground rent was £45 billed annually. The lease ended in 2091. Taking into account 65 years as a residual term we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus expenses.
Buckingham case:
Last April we were contacted by Dr H Howard , who
bought a studio apartment in Buckingham in April 2001. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Identical premises in Buckingham with 100 year plus lease were valued about £275,000. The mid-range amount of ground rent was £55 invoiced yearly. The lease end date was in 2102. Considering the 76 years unexpired we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including professional charges.